In this episode of Get Real Wealthy Season 3, Quentin talks about four important things young adults need to know to buy real estate.
First, Quentin emphasizes the importance of income history, which is essential for securing a mortgage from a bank. Banks typically require at least two years of income that can support mortgage payments before approving a loan. If you don’t have this income history, it may be difficult to purchase a property. However, there are mortgage products available that can help those without income history, but they often require a higher down payment.
The second is a good credit score. A good credit score shows that you are responsible with credit and will be able to pay back a mortgage. It’s important to monitor your credit and continue to build it by taking on loans and credit cards that you can handle and paying them off on time. The third is a down payment. These are the funds you need to purchase a property. One way to save for a down payment is through a milestone savings account, which we discussed in the previous episode. Another way is to receive a gift from a family member. You can also partner with someone who has a good income history and credit score in order to purchase a property together.
Lastly, he adds that education and mentorship are critical in real estate investing. Surrounding oneself with mentors and individuals who are already investing in real estate can provide valuable guidance and help young adults make informed decisions about their investments. There are many online communities and forums, such as EducationREI.ca and DurhamREI.ca, where young adults can connect with like-minded individuals and learn more about real estate investing. They can help you understand different aspects of investing, such as the importance of understanding the difference between positive cash flow and expenses and how to analyze properties to ensure they are a good investment.
In conclusion, income history, a good credit score, a down payment, and education and mentorship are four key concepts that you need to know to buy real estate as a young adult. By understanding these four things, young adults can be better prepared to buy real estate, reach their financial goals, and achieve financial freedom.
Important Links and Resources
Quentin D’Souza is the Chief Education Officer of the Durham Real Estate Investor Club. Author of The Action Taker's Real Estate Investing Planner, The Property Management Toolbox: A How-To Guide for Ontario Real Estate Investors and Landlords, The Filling Vacancies Toolbox: A Step-By-Step Guide for Ontario Real Estate Investors and Landlords for Renting Out Residential Real Estate, and The Ultimate Wealth Strategy: Your Complete Guide to Buying, Fixing, Refinancing, and Renting Real Estate.