How to Get Into Real Estate Quickly Even If You’re Young, in College, and Broke

Step 1

You need to form an investment team. Find several others who, like yourself, want to own real estate as an investment. As you get to know people on your campus or through your work, you will find others who are learning about the real estate industry, how the investment process works and how best to make money as a real estate investor. When you find these people, make time to have coffee, lunch or walk neighborhoods to look at properties in your area.

Step 2

Pool your resources. As an investment team of say 8-12 principals, you’ll want to take an honest assessment of each other’s assets, skills, knowledge and resources. Some people will come with a little bit of cash, but experience in carpentry, plumbing or electrical work. Others will have worked in property management and yet even others will be skilled at beautifully landscaping a property. Sit down and get it all on paper all of the resources each person brings to the group.

Step 3

Make your group a formal entity. Do your research to see which type of entity is best for you. Many real estate investors choose the Limited Liability Corporation. It is inexpensive and offers the most flexibility and offers protection of your personal assets in some cases. Talk to tax and legal experts to see which is best for your group, then follow through and make it official.

Step 4

Decide which type of investment is best for your group. If all of the group members are young, single and renting apartments, maybe your group can look into buying a small apartment building, such as a four-, six- or eight-unit building that many of you could live in. Not only would you be the owners, but you’d all be living in the building, paying rent to yourselves instead of someone else. As everyone lived on the property, you could develop a plan to fix the building up so that you could sell it for a nice profit in a few years. There are many different types of real estate investments, so what will work for one group may not work as well for another.

Step 5

Find a banker. Your group, if serious about owning real estate, needs to establish a relationship with a banker who will prequalify you for a loan, tell you the most the bank will loan you and discuss rates and other charges. Finding a banker should be a process that involves interviewing three or four professionals who have come recommended from others, and then choosing one who seems to click with the group.

Step 6

Find a real estate agent. Preferably you can find an agent who is licensed to sell real estate in your area and also approved to sell HUD and foreclosures in your area. Find several to interview and then pick someone to work with exclusively. You want an agent who works hard and brings properties to you that are in line with your group’s goals and understands your investment strategy.

Step 7

Find a tax professional. Once your group buys real estate, you will want to have a professional prepare your taxes. You do not each need to use the same person, but find someone knowledgeable in real estate and your type of partnership.

Step 8

Create an exit plan. Don’t think that your group will always remain together. Decide from the beginning how you will handle investors who leave, or if you want to add a new investor, etc. Don’t treat your partnership like a group of friends, keep it business-like, professional and get it all down in writing. You can all have a lot of fun, but make sure everyone is working off the same understanding from the beginning.

You don’t have to be rich or have a trust fund in order to get started in real estate investment. You also don’t have to start out alone. If you’re young, working your way through college, and feel ready to get started, find a group and start on the path to earning investment income. You will need to do your homework, learn the market in your area, develop a good team and pay attention to trends and the economy.