How I Bought My First Investment Property as a Teenager
Growing up with 3 older brothers who were young adults when I was teenager and who were all buying houses as investment properties, I was feeling envious and wanted to buy an investment property too. The challenge was, I was only a teenager and besides not having any money to invest, I really had no knowledge of how to be a landlord either. As the little brother I was always asked to come and help with the fix up and repair of the properties. Learning all these repairs were helping to increase the value, so I wanted to get into the action.
Then one day (when I was 15 years old) while mowing lawn for the local developer, my investment days sprang into action. On the North end of town was a new home development. The developer (Jim) called and asked me to mow these newly divided parcels of land that were being sold as individual building lots. It was a whole day mowing project and I was hired to take care of them for the summer and keep them looking good.
While mowing these lots, I had my first investment epiphany.
These were lots that were being sold to homebuyers that would build a home on it. I thought this would be a great way for me to start investing in real estate. I could buy a city lot, sit on it and as the lots sold out my lot would be in high demand. I did not need to know how to be a landlord and it would help me save money. I was fortunate to being raking in $100 a month at the time with all my lawn mowing jobs and I had to invest it so I would not be compelled to blow it on stupid stuff.
Armed with my epiphany, while driving back home with my garden tractor, I made a quick detour into the developer’s office. I sat down with the developer (Jim) and shared my objectives with him. From the conversation, I learned the price of the lots were $6,700. Jim agreed to take the $250 I had for a down payment and finance the rest on monthly payments of $70 per month. Wow, I thought this was perfect.
I still had $30 a month for spending and this was going to be a great savings plan for me. Of course I had to get my Dad to sign all the paperwork with me, which he was thrilled to do as he was so impressed I arranged this on my own.
Adding a Value Play
Taking Dad’s advice, I instantly went and planted some fast maturing trees strategically placed in the yard which would further enhance the desirability of the property.
(a recent picture taken of Larry’s first investment and the trees he planted on them)
I was now the proud owner of my first investment property. I enjoyed watching houses spring up around my property and was saving money at the same time.
Fast forward 3 years. I am now 18 years old and looking to buy my first income producing property. I have learned a lot watching my dad and brothers running their property and felt I was ready to become a landlord. To my surprise I got a call from a real estate agent stating he had a client looking to build a new house and wanted to know if I would consider selling my lot. I was shocked. While I was looking for money to invest in my first duplex right out of the blue I get this call to buy my land. “Could it really be that easy “I thought?
The short version is I sold the land for a net a profit after expenses of $3,500. I was able to buy my first duplex and my investment career was underway.
My Investment Lessons
As thrilling of a ride as this first investment was, it wasn’t until years later that I truly realized the education I received from this investment endeavor. I discovered this first investment was purely a speculative investment. It allowed me to save money and provided nice profit for me over time but did not actually provide a monthly income stream. Years later, I learned the difference between a speculative land investment versus the monthly returns and cash flow that renting property would provide to me.
It is funny how when you are young and fearless you can do anything you put your mind to. Over the years I continued to invest in rental property and repeatedly learn lessons from each one of them.
Taking action and digging into real estate investing will indeed get into your blood. It is something you will enjoy doing and can become a very profitable hobby for you.
If you would like to find out about cash flow and growth investment opportunties, give me a call today (941-718-7761) or join our FREE real estate investors buyers group!