How You Can Actually Start Investing in Real Estate at a Young Age
Many young people today ask the question “I don’t have a lot of money. How could I invest in real estate?”
To them I would say you may not have much money, but you likely have other resources that are valuable, such as time, energy and grit.
Here we will outline a few different ways you can get started as a young person without a ton of capital.
First and Foremost, Get Educated
The very first step towards investing in real estate is getting well educated and versed on the topic.
So many people look at the ultra-rich and think “I want to be that rich,” but what they don’t ask themselves is “Am I willing to put in the work that that person has in order to achieve what they have?” In other words, many people want the end result without putting in the work to get there.
Thus, first and foremost, go educate yourself. Whether that’s via online materials, books, podcasts, an online course, or seminar, just go start somewhere so you can learn what’s involved and then decide if real estate investing is right for you.
Once you’ve decided that real estate investing is something worth pursuing, you can start the process of actually putting some real skin in the game.
2. Earn More and Save More
So you want to invest in real estate, but don’t have enough money to do so? Two great options are:
Pick up a side hustle job
Cranking up your savings rate
For those who are super serious about starting to invest in real estate, they should do BOTH.
Doing both is actually a way to springboard yourself into being able to invest much sooner than doing only one of the above.
With the internet and the gig economy we live in, picking up a side hustle has never been easier. Many side hustles don’t require you to even leave your house.
There a trillion different articles and websites about how to increase your savings rate, so I won’t get into that here, but know that some great ideas are just a quick Google search away.
If you’re unable to pickup a side hustle and are already living on Ramen noodles, there are still more options available to you. One of my favorite ones is to bring in a partner who has the money to fund the deal.
3. Find a Partner
If you’re unable to invest in real estate on your own whether due to lack of funds or experience, you can always partner with someone who has what you’re lacking.
If you are going to partner with someone, make sure that you bring plenty of value to the table. You can use your energy, grit, and hustle to find the deals and have your partner fund them.
If you’re going to bring in a partner, you need to gain some first-hand experience to prove you have what it takes to execute on your part of the partnership.
This experience could be obtained in a couple of different ways:
Volunteer to help a seasoned investor with deals in exchange for teaching you how they invest.
Go work in an entry level position for someone involved in the real estate investing industry.
Once you’ve learned the fundamentals of real estate investing, you’ll be better positioned to bring value to a potential partner.
Now you just need to either find or fund deals, depending on which piece of the puzzle you’re lacking.
If for some reason you’re averse to bringing in a partner, there is still yet another great option for you!
4. House Hacking
This is a term coined by the folks over at BiggerPockets.
House Hacking involves purchasing a house or a small multifamily property (duplex, triplex or quad) with extra bedrooms/units and then renting out those rooms/units to roommates/tenants to cover your expenses.
Since you’ll be living in the property, you will likely qualify for the best financing as a first time homebuyer and can often use an FHA Loan to purchase the property for a low % down. Consult with a local mortgage agent to determine if you qualify.
This is a great way to get started investing in real estate because you’ll:
Start to build equity (i.e. net worth) in the property via appreciation and loan pay down
Gain experience as a landlord/property manager
Gain experience as a real estate investor while simultaneously getting a place to live
Investing in real estate is one of the fastest ways to generate long term wealth. The sooner you start, the sooner you can learn what it takes to be successful.
Additionally, the sooner you start, the longer you have to reap the benefits.
It is never too early to start, and starting can just mean picking up a book and getting educated. There is nothing that says once you get educated you have to invest — although, I would highly recommend it!