How to Get Your Young People Involved in Real Estate

By Jim Wood

Begin by teaching them about the lifestyle choice they’ll get to make each day of their lives: the choice of being rich, poor, or middle class. Once they make that decision, show them how they can use real estate as a vehicle for reaching their chosen destiny.

Let’s face it… for almost everyone starting out, investing in real estate is just another job. Part time, yes, but still a job that takes additional time away from family and friends. Rare is the first-time investor who has the available funds to jump into rehabbing or buying rental units without another job to support them. Most of us get started as real estate entrepreneurs by doing real estate “on the side” in the evenings and on weekends while keeping our day jobs to meet our families’ financial needs.

My wife and I got into the real estate business almost accidentally. Out of necessity, we would buy junker houses to live in because that was all we could afford. Then we would fix them up while we lived in them. As the family grew, we would buy another house with more bedrooms and baths and fix that one up. All this was happening while our children were young.

I got started as a real estate entrepreneur when a friend of mine who rehabbed houses talked me into buying a house at auction to renovate. My wife and I bought that first investment property and went about renovating it ourselves. Very quickly I was declared by the family to be an “absentee father.” My wife and kids missed me, and I missed them.

So, to solve this issue, we turned the rehabbing into a family project on evenings and weekends. Beginning in the third grade, our kids had “age appropriate” construction helper duties that they performed. Yes, they were paid well at the time, and as wage earners they funded their own Roth IRAs. We did everything we could to make it fun for the kids. On rehab days, they got to choose whether we would eat at Rally’s or McDonald’s, which was a big deal for a third grader and a seventh grader.

As an additional reward for their help, whenever we sold a house, the kids had major input on where we would use some of the profits for family vacations. We wanted them to see the connection between participating in real estate and the financial rewards that came from a successful project. We also shared the financial numbers on each deal, so they got an eyes wide open look at how money was made.

In my opinion, every parent should teach their children early and often about where money comes from: from working hard to delight a customer and from working smart to get a job done better, cheaper, and faster.

The “financial awareness system” we used to teach this value was simple. Our children learned the difference between things they needed and things they wanted.

For example, they needed gym shoes for PE class at school. They wanted designer sneakers with a $150 price tag. Mom and Dad would pay for a perfectly good pair of shoes, but if the cool factor was something they just couldn’t pass up, they paid the difference.

Want to go to Space Camp? Mom and Dad would pay half, and the future astronaut would earn the other half.

Since they were too young to have outside jobs, we provided plenty of opportunities to earn money around the house. Need money for something? Go look at the chore list on the refrigerator. Wash the car. Vacuum the car. Sweep the garage. Earn the money.

And beginning in their teens, they could read a book from The Wood Kids’ Reading List and share what they learned with Mom and Dad for $100. You get the idea.

To get young people involved in real estate, you’ve got to understand where they are in life. Here’s what I’ve learned over many years as a college professor.

Most have very little money.

Most have very little self confidence because they have very little life experience.

Many spend enormous amounts of time consuming content, scrolling social media, binge watching shows, or gaming instead of building skills or assets.

Most are looking for the “love of their life” and spending every possible minute with that person.

Many carry too much debt from college loans, credit cards, or purchases they now realize were unnecessary.

Most lack a social support group that is interested in real estate or in building long term wealth.

Strategies to Get the Young People in Your Life Involved in Real Estate

If they are going to college, consider having them start at a community college for the first two years, then transfer to a university to complete their degree. Save the difference in tuition, housing, and fees so they have a nest egg to purchase their first investment property.

If they are determined to go directly to a university, consider buying a house near campus. Have your child serve as the property manager. Let the tenants help pay down the mortgage while your child learns the business and builds savings for future investments.

Pay for their first three years of college. Then have them pay for the last year from money earned working in the family real estate business. One well executed rehab project can go a long way toward paying for school.

Have them work in the family real estate business by calling FSBOs, writing letters, posting online ads, managing social media, helping with video content, or listing properties on sites like Craigslist and Facebook Marketplace. Their pay for this work should be better than what they would earn in a mall or retail job.

Teach them how to negotiate for the best price on everything. Make it a game to avoid paying retail whenever possible. Buy low and sell high.

Teach them how to identify and solve problems, both people problems and property problems.

Encourage them to use their technology skills to find deals, market properties, analyze opportunities, and build systems that save time and make the business more efficient.

Practice open book management so they can learn as much as possible about the “Great Game of Business.”