investment advice for teen

[dabosh]

i am 18years and was wondering if there was any way to buy an investment property within 5 or so years? would tax sales/deeds be my best bet at obtaining a property or is there another option?

thanks in advance!

[RyanRE]

i am 18years and was wondering if there was any way to buy an investment property within 5 or so years? would tax sales/deeds be my best bet at obtaining a property or is there another option?

thanks in advance!

I think that the biggest roadblock for young people to buy homes is the financing. Since tax sales typically require cash, that might not be the best option for you. I would recommend purchasing a cosmetic fixer in an older neighborhood that is up and coming. I did great on my first real estate investment, which was a 1926 Craftsman that needed a face lift. My advice to you is to save as much money as you can for a down payment and working capital.

Out of curiosity, how much do entry level homes cost in your location?

[dabosh]

if by entry level homes, you mean the most affordable, then in my area they would generally be around $200,000 cdn...for me to acquire a property like that would take quite a bit of time and saving.

[century21pei]

I'm 22, I bought my place at 18. This is what I did: I bought a 3 bedroom triplex unit with 5% down. This means paying extra through CMHC every month because it is seen as risky. The place I bought was only $100,000 (East Coast of Canada) and was in walking distance to the University I was going to. I then lived in it and paid "rent" and had two roommates who also paid rent.

This has allowed me to share the down payment with other people (they are just renters) and I've been paying the same as I would have if I had rented. Only I'm working down my mortgage and getting some appreciation from the property which when I sell to upgrade properties will give me a nice down payment for the new property. I have also learned a crapload that they can't teach you in school.

What I did to get a down payment was worked my ass off in Calgary for a summer and then used the savings for a down payment.

Feel free to PM me if you have any questions.

Good luck.

[RyanRE]

if by entry level homes, you mean the most affordable, then in my area they would generally be around $200,000 cdn...for me to acquire a property like that would take quite a bit of time and saving.

I didn't realize that you are Canadian. That makes a big difference in financing. I think that Century21pei had the right idea to buy an inexpensive house and rent it with friends. Realistically I think that you are going to have to suck it up and work for a small down payment to make it work. Unless you have a close family member that will loan you the down payment money until you eventually sell the house and can pay them back.

[dabosh]

Thanks for the response guys, but being so young, even if i was to save enough money for a down payment, wouldn't I still need to take a mortgage? and what are the chances of the bank giving me a mortgage? would that then mean that i would have to rent out the property to pay for the mortgage?

Sorry for all the questions, but i am trying to learn as much as possible from those who have had experience

[golem]

Real Estate Investing Tips For Beginners Buying a property for personal use or investing in real estate involves a large capital outlay and people doing so for the first time need proper guidance in order to avoid making a mistake and losing financially. Consulting a good real estate book or experienced experts in this field are helpful options for such people. A familiar real estate agent can also be of great help.

[RyanRE]

@Dabosh ~ I really think that you should just talk with a local lender and real estate agent to set up a plan for the future. A good plan is better than any "get rich quick" scheme.

[escapeso]

Ryan is right. I would avoid the get rich quick books and videotapes.

I dont know about Canada but lending has gotten more difficult in the US. I think the two keys are downpayment and getting a good credit score. So basically getting a job that helps your credit score (this might mean avoiding a job where all your income is in tips and therefore doesnt help you as much in the loan process). And of course saving as much money as possible.

I would avoid tax sales for your first purchase. They can be kind of risky espically if you are not an experienced investor. Getting a straight up single or multifamily property might be safer.

[gael]

ok, I got your advice.. Thanks for that... I really learned a lot!