Starting with ZERO money?

Question

Hey everyone,I'm seeking for advice, tips, dos and don'ts as well as maybe's. I feel like I've got a good grasp of knowledge on real estate investments and strategies, but I don't have the fine tuning. After just recently getting out of the Marine Corps, I don't have have cash to drop on properties to Buy, Rehab, Rent, Refinance, and Repeat on properties. That really only gives me one option which is Private Money Lending.Is it legal to conduct a deal with a real estate agent for them to find you a house + providing you 100% of funds to purchase and rehab this house? In doing so they would get a solid return on this one property.Would they even consider doing that even if it is legal?I'm just trying to brainstorm ways I can find a Private Money lender to help me start from Zero and we both get the most out of it.They get a great return and I start my portfolio and experience + a little bit to start the next one.Please let me know what you guys think, I would love some feedback. Also, if you're in the Camp Pendleton/Oceanside area let's connect!

Tim Johnson · Answer

@Zachary Wurtz I'm sure you don't intend it.....but this is how most folks on this forum will hear your comments: "Hey everyone, I'd like to go to the casino and spend an evening gambling....would any of you let me use your money? You'll make a handsome profit once I share my winnings with you." @Ran Iarovich is correct. REI is a long-game, even if there is the occasional quick and easy profit to be had. That is rare. Cash is crucial. Especially your own. Have a job. Save like crazy. Definitely use your VA loan. Are you aware of what a serious benefit / provision that is? The multi-family househack mentioned above has been a stellar move for many.... but there are many other options. And you'll find them if you're willing to bear down..... yes, "stay ambitious but patient".

Tess Reitz · Answer

Hey Zachary, thanks for your post and for your service. There are definitely ways to get involved with REI without capital but there are some things for you to consider if you aren't able to bring the cash or experience (yet). First, clarify what skillset ARE you bringing to the table? Sounds like you want to start with BRRRR strategy. Can you find the deal? Sounds like maybe this isn't your wheelhouse yet since you mentioned using an agent. Do you have the skills or the relationships to manage and/or complete the rehab? How strong is your hold on your personal finances right now so you can successfully cash out refi? Don't have a ton of context of course but based on your post, keep building your network and knowledge base while you work on shoring up your personal finances and save, save, save. The house hacking strategy with a VA loan, even if you go $0 down, is great but that still requires reserve funds to support homeownership expenses. Keep after it!

Ran Iarovich · Answer

Partnership can lead to a lot of headaches in the future especially if you don't have a prolonged history of trust with the individual. Since you served in the Marine Corp aren't you eligible for a VA loan? If you can find a lender that can qualify you why not buy a multi-family investment (duplex, triplex, quadruplex) and house-hack it to renters while you live in one unit? Also, you should be very careful before going into real estate with no money. Even with a partner, how are you going to save yourself from repair costs that may come up or disputes between you, your renters, or your partner?Real estate is a long-term play and the worst thing you can do is to set yourself up for disaster in the beginning. If you are really knowledgeable in investments, I would take a year or 2 or however long it takes you to comfortably afford a home and not have an anxious conscious about constantly trying to keep your head above water. Stay ambitious but patient,Best of luck,Ran

Anastasia Osorio · Answer

Best thing you can do is go to local networking mixers and meet people. Form relationships and then see if anyone is interested in partnering up. I am sure many agents would be excited to help but remember they have a duty of avoiding conflict of interest because of liability but I am sure there are ways to make your idea happen legally and ethically with a knowledgeable agent. I liked the person above warning you about partnerships because they can be messy but they are good to get your feet wet and learn to fail faster; just beware and protect yourself. It will be a fun adventure. Take your time and find people you can trust.

Caleb Brown · Answer

I would not invest yet. No money is not good to start. Sure you can get creative but you have no track record and no capital to fall back on if things hit the fan. Work on your income. Whether that is more hours, new job or a side job. Start saving. Since you are military use your VA loan. Can you do a house hack? Could be a single family or multi family. REI is a long game so be patient and put together a plan.

Zachary Wurtz · Answer

Thanks for the insight Ran! As for the VA loan, I have to make it my primary residence for 2 years before I can turn it into an investment property.