Can I do it?

Question

Hello,
   I am new to this forum and I sure have a lot of reading to do. I have decided that real estate investing is going to be the tool I use to gain financial freedom. I have already enrolled in an online REI course through my local tech school and I think it is going to be very good. One of the things the teacher has already stressed is that "there is more money (financing) available than there are deals". I find this hard to believe, but wanted to get your opinions.
   I am 47 years old. Have a job that barely pays the bills. I have a house  that I have maybe $50,000 equity in. I never intend to sell or leave this house. My other debts total about $5,000. My vehicles are paid for. I have very little savings. About $3,000, and another $3,000 in a 401K. I don't know my actual credit score, but I have no bankruptsies or reposessions and my mortgage is current. I have been late on a C/C payment or three in the past but nothing major. My credit should be pretty good, but I know not having a lot of money in the bank hurts it.
   I want to get into real estate investing and am just having a hard time believing that the financing will be available to me. I'm thinking I would like to start out maybe with mobile homes and moving up from there. Is it possible to buy a mobile home/land package (singlewides) and sell the home with owner financing, and keep the lot for lot rent? Or will the numbers just not add up. I apologize if my questions sound stupid. I am a real noob at this and need all of the direction I can get. There are no REI associations near me that I can find. Also, I fall in the category where any friends or family members I go to for advice are just going to tell me to "keep my day job". There will be no positve reinforcement forthcoming around here! Thanks for any and all advice. MJ

Gary Johnson · Answer

Thanks for the advice. I guess I used a bad choice of words with the "quit your day job" deal. I have no intention of quitting work until I can afford it. What meant was that all of my friends/family would tell me I should not be doing this. That I will surely fail. So why even mention it to them? My previous track record with business/financial matters would probably back them up. But I have been successful in a few endeavors when I have really put mind to it. So I know I can do it. Thanks! MJ

Frank Adams · Answer

Well mach9; you've set some good, reasonable goals for yourself. Here's some random thoughts on what you posted.

I'll tell you the same thing, but for a different set of reasons. Health care benefits, keep funding your 401k, use their phone, fax and copier when you can!

Yes, but you might decide the profits there are so great that you never want to "move up". I have friends that own higher end rentals, and high dollar ($200/night) weekend lakeside rentals. They think those places have more "style" or "class" or something.

I typically rehab and flip lower end ($50K-$70K) houses, several of my buyers speak almost no english (heck that's why "google" has free translations) but always pay on time and those houses pay like the devil!

The heck with "style or class", give me profits every time.

I would suggest you buy (on ebay or somewhere else that's cheap) Lonnie Scruggs' book "Deals on Wheels", generally referred to as "DOW". Lonnie's business model is to buy a mobile for 10-25 cents on the dolar (trust me no MH seller's asking price is within 50% of what he'll take to walk away) and resell it for "terms"

There are two sides of every deal, there's "price" and there's "terms". 99.99% of all buyers are "terms" buyers. If they weren't the car companies, and payday loan places would have been out of business years ago.

Lonnie's "terms" make it easy to the buyer to say yes. When you pay $4K for a MH and resell it with $1500 down payment and "payments of only $220/month", you've got a cash cow. That kind of cow makes for some good milking!

Good luck and keep plugging.

all cash

Gary Johnson · Answer

Ryan-I know I'm capable of it. I just have to get the nerve up to pull the trigger. I'm just wondering if the financing is truly available to somebody in my financial situation, which, I know, could be a lot worse.
Boricua-Thanks for the advice and keep it coming. I know I'm going to have to rely on sources like this for my encouragement. 'Cause I ain't gonna' get it at home! Thanks. MJ

Eddie M. · Answer

Mach9,

Hang in there.  You need to read as much as you can and ask alot of questions so that you clear up anything you don't understand.  You need to take action and make things happen.  You will always find people who are negative about what you are doing, don't listen to them!

Good luck,

Ryan Webber · Answer

"Whether you think you can or you can't, you're right." Henry Ford

I would say there is a lot of truth to the statement that there is more financing out there than there are deals.  My biggest problem is not having enough deals.  I know that if I can find a deal, a real deal, I can find the financing.  Even if I didn't have good credit and even if I hadn't established myself with banks, I know that if I can find a deal, a REAL deal, I can find the financing.

Financing is very important to this business, but the key to this business is finding the deal.

Out of my first ten deals I had one loan that they actually checked my credit, and it was a refinance.  Hard money and seller financing are two options for those that are credit impaired.

Now obviously improving your credit should be an extremely high priority, because money gets a whole lot cheaper when you have good credit, good assets, and a good track record, but I wouldn't let bad credit stop you.

I personally am the type of person to figure out what I want to do, and then figure out the way to do it.  I won't always see every step from the beginning to the end, but with the vision of the end firmly planted in my mind I WILL find a way to get there.