I hear it allll the time, “I wish I had gotten started in real estate earlier”. And a lot of responses I get from people of younger age is that they’re TOO YOUNG to get into the industry.
THIS IS WRONG. There are many ways for you to break into the business before turning 21 and we’re going to talk about that in this video.
First step is that you want to get a w-2 job. Lenders will be looking to see if you have a steady income and will be able to make your monthly payments. You will need to provide pay stubs for the previous 30 days that show that you are employed and have a steady income. It is also likely that you will need to provide W-2 forms for the last two years. Now don’t be worried, you don’t necessarily have to have a crazy high income job to do so but they do have standards.
To calculate your maximum monthly loan payment allowed by the lender, you would take your gross annual income divided by 12, then multiply by 40 percent. For example, if your gross income is $40,000 then your maximum monthly payment will be around $1,333.
Next step is building your credit score. You want to get on this as early as you can, as soon as you turn 18. Just starting off you should have a clean slate when it comes to your credit score and you want to stay on top of your game when it comes to building and maintaining your score. A couple key points would be to use it when you can but be sure to keep your balance low and pay in full. Stick to it and you’ll be on the road to a perfect credit score.
Saving. Saving. Saving. Instead of wasting your money on pointless things, SAVE. I’m not saying don’t enjoy life but I’m sure there’s many times where you can tell yourself “you know what, I don’t need to be spending my money on this.” When looking to get a property you typically want to have about 10% of the property cost which includes the down payment and buffer money.
The last thing you want to get into is educating yourself. Read books, watch youtube videos, and talk to people! You want to get into the industry knowing as much background information as possible and this will get you one step ahead. Find out loopholes that can benefit you and be cautious of things to stay away from and things you should lean towards.
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Allon Avgi is the Founder and CEO of AVGI. Allon started AVGI at 21 years old when he acquired his first real estate investment in Long Island, New York. Allon has since developed a diverse real estate holdings company that has reached $50,000,000 in rental properties within only 4 years using his own money and that of a select few individuals. As he starts to open AVGI’s investments to outside capital and build strategic partnerships, he has ambitiously set a target to acquire and manage a $1 billion real estate portfolio by the time he is 30 years old.