I Bought A House At 24 Years Old
Here’s How I Did It and How You Can Too
First off, I think it’s important to mention that I’m not 24 anymore.
I’m actually a little over 30 years old now, but what I have to tell you still stands true today.
You should also know that I wasn’t born rich, and that my parents lived paycheck to paycheck. In fact, they still do — which means I didn’t have any help or support from them when I bought my first home.
In fact, they didn’t want me to buy a house at all and they really laid the guilt trip on thick to try and stop me. I didn’t listen to them, thank goodness.
My friends and coworkers thought I was crazy too — that it wasn’t possible to buy a house while working retail — but I showed them that it was, and here’s how I did it:
Workin’ 9–5 (Or More Like 6AM — 12AM…Or Later.)
Even though I had been steadily employed at a movie theater since I was sixteen years old, I new that I couldn’t make a living and support myself on minimum wage alone — especially in the Seattle area’s Greater Eastside.
So at 19, to make sure I didn’t lose my apartment, I got a second job in retail. The pay was a little better, but I would still have to regularly work double shifts between both jobs and sometimes even get close to triple shifts.
When I could, I always made sure to try and work as much overtime as I could get to help me meet my goals.
The hustle was real; there were times when I’d only get 3 or 4 hours of sleep before I had to be back at one of my jobs again.
It certainly wasn’t an easy time in my life, but it was worth it in the end.
Saving
Everyone thinks saving money is a no-brainer, but it’s actually one of the hardest things to do while you’re working retail and trying to pay for your own apartment at the same time.
Still, it wasn’t impossible. I tried to follow a strict budget and I would pay my bills first by putting the funds into a separate checking account (my “bills account”) until I could pay them directly.
I then paid my actual savings account second, and I paid myself (my “fun” spending money) last.
It was slow going, but every little bit that I saved counted towards a BIG life change.
401k
People often overlook their 401k plans, but this was one of the two single most important steps I took to make it possible for me to buy a home.
Most people think that a 401k plan is only for retirement — and it’s true that it was created with that in mind — but it’s also an incredible tool that you can use to save and invest pre-tax dollars, and you can use that investment as a down payment to buy your first home later down the road.
This can be done by making either taking out a loan on the 401k, or by making a withdrawal from it. FYI — early withdrawals may be subject to penalty fees.
But I digress, the second I received my enrollment forms, I signed up for a 401k.
A small portion of every pre-tax paycheck was automatically placed into my 401k account at the end of every pay period. It didn’t even feel like I was missing any money — but boy let me tell you — I sure did notice the five-figures I had in that account after just a few years.
Employer Match
If your employer offers a 401k matching program, take advantage of it! I did not and I sincerely wish I had.
It’s practically free money and I wish I had contributed a higher percentage of my paychecks to max out that benefit. My 401k account could have been easily twice as profitable, had I done so.
Credit
I’d always taken credit really, really seriously. I started building credit at 18 years old, with my first credit card.
By 24 I’d built a score up to around 700. It wasn’t perfect by any means, but it was good enough to be considered low risk.
A good credit score will also make it possible for you to get lower mortgage interest rates, which often translates to lower monthly payments.
Partnership
Now, I know I said that I didn’t receive help from parents — and that’s true, I didn’t.
I didn’t receive any money from anyone. I saved for my down payment all by myself and it took five years of patience to do so.
But when it came time to make a purchase, I came to the hard realization that even though I had enough money for the down payment and closing costs, my monthly income wouldn’t qualify me for a loan.
To get around this, I decided to partner with my boyfriend (now husband) to buy the house.
When the lender took into account both my monthly income and his (he worked retail too), we then qualified for the loan!
Don’t worry though, you don’t need a significant other to do this. You can find an investment partner of your own, someone that you trust and get along with reasonably well — someone that is responsible.
Just know that no matter how much you trust your business partner, you should talk to a lawyer and get a written agreement in place.
You never know when a partnership can go downhill, and you need to be prepared for the worst, no matter what!
Market Research (Neighborhoods)
I had the down payment.
We qualified for the loan.
But — we still couldn’t afford the area.
So we spent weeks researching the different market areas within an hour of our home town.
We decided that it was worth it to make a sacrifice and move away from home to buy a house in a brand new city.
We started looking at prices and square footage, then when we narrowed it down we started looking at things like crime rates, nearby schools, and other amenities.
Education (On the Process)
During the entire time, I always made sure to try and stay educated. I never wanted to be left out of the loop.
If I had a question, I Googled it or asked a professional.
I learned about credit requirements, debt-to-income ratios, escrow, and so much more.
Always keep learning. Always ask questions. It’s the only way to be prepared when something goes wrong — and let’s be real — there seems to always be curveballs thrown at you in real estate transactions.
Interviews
When we were ready, we looked for a real estate agent.
Back then, I didn’t know as much about them as I do now but I knew that I needed someone that had a lot off experience, and I needed to feel like I could trust them.
So we looked and really dove into finding the right agent.
We narrowed it down by first looking for agents that were familiar with the city that we were looking to buy in, then we started to look at how many contracts they closed within the last twelve months.
I felt that if they had a sizable history of closed transactions, then they had a sizable amount of experience.
After our research, we arranged an interview and found the person who would help us buy our first home.
After that, it was time for the fun to begin. We toured several houses and put in an offer.
It was accepted but unfortunately the sale fell through due to negligence on our lender’s part. We quickly found another more reliable lender and closed on our house 30 days later.
We’d done it. We were officially home owners.
I know that the world is a little bit different today, but I really believe that some of these tips and maybe some of my experiences can help you buy your first home in the future.
Just remember, it takes time and patience, but there’s always a way to follow your dreams — you just have to find it.
Oh Hey, It’s Ray is a real estate investor, entrepreneur, and former real estate agent. She lives happily with her husband and two children in the Pacific Northwest. See more from Ray at her YouTube channel and on Ohheyitsray.com