Where to start when your young? - Posted by MVM
Posted by MVM on July 25, 2003 at 03:08:27:
I?m 18 and have read so many REI books I?m sure I could set up a no-money-down deal in my sleep. Since I?m only 18 you can probably assume I don?t have much money, other then income from a part time after school job. Before I go off to college I?d like to get my feet wet and do a little deal. SO, here?s my game plan, tell me what you guys think.
I plan to start off with wholesaling (flipping?) contracts to other investors for a small profit. This requires very little money of my own so I think that fits my budget quite nicely! I get to learn the ropes and earn money while I do it?earn while I learn if you will. The next step after I?m comfortable enough would be to find a partner who I can do a 50/50 split rehab with when I find a really good deal. He gets the loans after I find the deals. We could both rehab the properties with both our money (money I make from flipping) then sell them at retail prices. Again this works for me because I lean how to manage fixer-upers while I make money to boot. This next step is where I hit a wall though. Now I?m comfortable enough to get a loan and do rehabs or lease options all by myself but who will lend to me? I could probably get a hard-money lender to do it if it?s got a good LTV, but will I be stuck with hard money lenders all my life? No banks (not even community banks) lend to people that are self-employed and in college! The only way around this (that I can see) is to incorporate and start flipping properties through a corporation so that way I?m listed as an employee when I show the bank my tax returns for two years. (two years is the minimum I think?) And I?ll grow a beard shudder so I?ll look older and wont get laughed out of the bankers office. If I ever figure out a way to overcome the transition from partner too independent I?ll probably move on to 8 unit apartments and build my passive income portfolio section; after that I?ll go up to 8 units then 12 etc, etc? I?ll just keep diversifying my techniques and mastering new ones all the while reading loads of books on REI.
Well, what do you think of my game plan? Sound good? I get to start off with no money, make money, invest the money I make then keep building from there. The only problem is with the transition. I want to get involved in real estate full time as soon as I can. I don?t plan on being a slave working for a boss the rest of my life, no way. I?ve known that for as long as I can remember. However, it seems banks only give loans to people with high paying jobs who work for OTHER people. If I want to start making the big bucks on my own I?ll need to be an employee. I?ve read a lot of success stories about guys just out of college who are now lease optioning houses and rehabbing them, so I know it cant be a huge problem, its just some concept or step I?m missing probably.
So, enough rambling, I?m done. Time to tell me what you think of my game plan.
Cheers to my future success.