A real estate consultant in Melbourne who bought his first home at the age of 19 tells how he did it
A Melbourne sales advisor revealed how he bought his first home worth $ 350,000 at age 19.
Andy Pater, 22, shared his insight by posting a video TikTok in December 2019 and outlined a three-step guide explaining how others can do the same.
Construct Homes employee has been in the real estate industry for four and a half years and told FEMAIL buying a house was ‘stressful’ and ‘one of the scariest things’ he has ever done, he doesn’t regret it.
Before buying the property, Mr. Pater said he had made two arrangements with a real estate agent to ensure he made the right decision.
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Andy Pater of Construct Homes (pictured) revealed how he bought his first home at the age of 19
Mr. Pater’s first recommendation involves buying a mansion “out of plan” because the developer only requires the down payment without further progress payments
“To be honest, buying the property at the age of 19 was a very risky move, as there was no guarantee that the bank would give me a loan,” he said.
“If you’re that old, even if you have a full-time job, you’re highly unlikely to get approval for a huge loan to buy a house.”
Mr. Pater said his parents chose to guarantee the contract to provide additional stability.
“The most important thing to consider before buying a home is to think about why you want to buy it in the first place,” he said.
“If you buy for investment or make you happy – great! If you’re buying to impress your friends or family, that’s not a good idea. ‘
In the TikTok video, Mr. Pater’s first recommendation includes the purchase of a mansion “ off the plan, ” meaning the property has yet to be built and the developer only requires the down payment.
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He says buyers should then negotiate the lowest down payment. Mr. Pater managed to arrange a 5% deposit of $ 18,000 for a two-year repayment.
Despite not having a down payment at the time, Mr. Padre said he had sold many personal belongings and borrowed money from family to help with the weekly refunds.
‘Because [the house] not yet built, you have about two years to repay that $ 18,000 loan [to be] about $ 170 a week – and if you work and live at home, that shouldn’t be a problem at all, “he said in the video.
When asked about the ‘off the plan’ method, he said this option worked best for him as he only had to repay the deposit in two years, giving him more time to save.
He also said that negotiating a lower down payment can be difficult and whether success depends on how eager the developer is to make the sale.
Mr. Pater said he had managed to arrange a 5% down payment of $ 18,000 to repay in two years. He got the money by selling personal belongings and borrowing money from his family
HOW did Andy Pater buy a house at the age of 19?
Buy a mansion ‘off the plan’ which means the house has yet to be built
Negotiate for the lowest possible deposit
Mr. Pater managed to settle a 5% deposit of $ 18,000, with repayments of nearly $ 170 a week over two years
Once the two years have passed, organize the home loan, move into the new home, and check if the property has increased in value
When organizing the loan, Mr. Pater also recommends going through a broker to save buyers unnecessary stress and make the process a lot easier
The third and final step is to organize a home loan.
“The banks check everything you pay for, so it’s a good idea to stop ordering takeaway from UberEats and cancel your Netflix subscription,” said Pater.
He also recommends going through a broker to save buyers unnecessary stress and make the borrowing process a lot easier.
Mr. Pater says that once buyers have reached this stage, the home may have appreciated, adding equity to the mortgage.
He said that depending on the market, buyers have anywhere from $ 40,000 to $ 60,000 in equity to buy another property.
The original video has been viewed over 161,000 times since then, and Mr. Pater has continued to share his advice on the platform and his Youtube Channel.
When asked about the current state of the market due to the COVID-19 pandemic, he said that people are certainly still looking at buying houses.
After paying the deposit for two years, the third and final step is to organize a home loan and investigate whether the property has increased in value
He said that depending on the market, buyers have anywhere from $ 40,000 to $ 60,000 in equity to buy another property if desired
For those who aren’t ready to buy a property yet, another Melbourne broker Jared Kirkwood posted a 15-second TikTok video with three ways to set aside enough money to get started.
In the first step, Mr. Kirkwood advises people to open four bank accounts and name them Erry Day, Bills Away, Rainy Day and Home Someday.
Jared Kirkwood, from Sheridon Holmes in Melbourne, shared his three-step plan to get a home deposit online
He then recommends dividing your income by plugging 40 percent into Erry Day, 20 percent into Bills Away, 15 percent into Rainy Day, and 25 percent into Home Someday.
The last step is to adjust the 60 percent of your income and live on the Erry Day and Bills Away accounts while saving 40 percent for a rainy day and a home deposit.
The video has garnered more than 155,000 likes since it was uploaded earlier this month, but the commentators were divided.
Some fans praised the advice for being practical.
“You are more useful than school,” wrote one person.
Another said, “I learned more from this video than my economics course.”
According to Mr. Kirkwood, opening four bank accounts is the first step towards saving a home deposit
Mr. Kirkwood advises potential home buyers to spread their income over the four accounts
Others said the steps were not realistic for their budgets.
“Yes, a bit difficult if the rent is only 50 percent, plus bills and food / gasoline / daycare / car rover / guarantees / tires,” said one woman.
“Hahaha no, my rent is 75 percent of my income, but nice to try,” was another comment.
Mr Kirkwood has been publishing popular real estate advice on TikTok since April.
In the videos, the New Homes Advisor recommends building your first home rather than buying a home.
The Melbourne real estate agent says people should try to live on 60 percent of their income while saving 40 percent
Mr. Kirkwood explained that the price of land blocks and construction costs can be cheaper than buying a house in the same area.
This gives potential buyers the opportunity to design their own home, and the value when finished will exceed the cost of having it built.
First homeowners can then use the equity created when building their first home to buy another home, increasing their real estate portfolios.
Mr. Kirkwood’s steps are similar to those in step two of The Barefoot Investor’s best-selling financial handbook.
In it, author Scott Pape advises people to open four bank accounts and name them every day, splurge (short-term), smile (long-term, like vacations), and fire extinguisher (a home deposit).
Income is then distributed, with 40 percent going to savings (spending 10 percent, spending 10 percent smiling, and fire extinguisher 20 percent) and 60 percent used in daily bills to live and pay bills.
JARED KIRKWOOD’S THREE-STEP PLAN FOR SAVING A HOME PAYMENT
Open four bank accounts and name them:
One day at home
Divide your income as a percentage in these accounts as follows:
40 percent every day
Bills gone 20 percent
Rainy day 15 percent
Home One day 25 percent
To adjust. Live on 60 percent of your income (Erry Day and Bills Away). Save 40 percent for a rainy day and a home deposit.