Am I Too Young?

Chris

At 18 you have dreams and boundless energy. You can put in those 20-hour days that grind us 60+ year-olds into the ground. But - do you have a line of credit that's going to support you through this endeavor?

You want an old house that's cheap. You can find that. The cheaper it is, the more it will likely need, and the more time it will take. You'll get the roof fixed and the windows replaced to keep the weather out, and then you'll need insurance in case some vandals decide to break the windows. Insurance on an un-occupied house isn't cheap. As soon as you get the place gutted, re-wired, and re-plumbed, you'll want to do some drywall, and then you'll need to keep heat in the place, and so on...

Before you talk to a realtor, do a spreadsheet on your finances and see what kind of continuing resources you can bring to the project. It will be satifying, frustrating, rewarding, and expensive. We live in an old house that is a continual "work-in-progress" and has been for several years.

You'll be justifiably proud to show your children what you've accomplished. There is, however, the possibility that when you finally meet THE right girl, that your old house won't be as appealing to her as to you. Life is what often happens when we're making other plans....

The reason those old properties are in the shape they're in is because most folks don't think it's profitable to fix them up. And they may be right.

Your general idea is good, but I'd focus on buying something that it in reasonably good condition but could use a little work. If you tackle a big project right off the bat, you're likely to get overwhelmed both by the work and expenses. Believe me, any repair you do will take longer and cost more than you think.

You can always sell (or rent out) a house that is in livable condition. If you buy a house that needs big repairs, you're looking at a negative cash flow situation that can wreck your credit for years.

One other note about the apprentice program. This is a great opportunity. However, it can take quite awhile to get into these programs because there's usually a waiting list. While you work your way through the application process, keep busy. Check out programs at your local community college, these are a great way to build your job skills.

Good luck.

You dont have enough credit to get a decent loan rate. Not the end of the world, but reason alone to wait on buying your families future home.

Debt is something you want to avoid at your age. Its the trap your peers will get buried by and never attain wealth. AVOID IT ON EVERTHING BUT YOUR HOUSE! Except a credit cart to establish credit.

Dream big, but within reason and build your way there. I looked at a small old farm house near me for 38k on 1 acre last week. It had holes in the floor, and needed lots of work. If you can buy something like that, go for it. You will have a place of your own, energy to fix it, and it will be a stepping stone. If you bought that house and fixed it up, in a year or two you will be able to sell it and have made a cool 30K! Build your way up doing it like this and by 25 you will have well over one hunderd thousand in the bank.

To do this you will need excelent credit and cash. So start small so you dont get run over if something goes bad.

Lesson 1 I would be a Millionare if I hadnt fuc^^%d up my credit at your age. When I was 21 I Wanted to buy a bunch of Multi family houses in a up and coming area near where I grew up. My cred was bad and I couldnt get financed. Had I been able to buy those 3 or 4 places in 1997 I could have sold them for 1.3 mill in todays market. All I needed was good credit and about 30k. I was lucky and did get my grandmother to sign a short term loan on one place. Sold it at 23 and made 50k. I re-invested that money and borrowed another 50k (from family because of bad credit) To buy a fixer upper. That project made me another 30k. By the time I was 26 I had 80k in the bank. Prices got so high up north that my family couldnt help anymore. So that more or less ended my flipping. It did allow me to buy my first family house cash at 30 years old. Its an old farmhouse that was gutted. If I wanted to sell it today, I could get 60k more than I have into it. (not bad for 4 months work).

lesson 2
Re-read lesson 1 Im doing ok, but see why you need to make smart choices now!! Dont over extend yourself!

Dont get tied down with having to provide or look after others for a few years.

You have a great Idea, Just take a slower...smarter road there. If you make good choices you can be semi retired buy 30 like me. Here is the real secret...I owned 2 houses and had money in the bank when I met my wife. Because I had my sh&t together more than most 25 year olds I got myself a beautiful wife who also makes nice money. I bought her a house, so now I get to work when I feel like it or need some extra money!!!HA

One other comment thought; as early as you can, start putting money into retirement plans; IRAs and 401k's and such. That is another thing I wished I had started alot earlier. $100 will likely be a heck of a lot more at retirement if you socked it away at age 25 compared to if you invested it at 35. Good luck.

Hurst