Should I believe him?

Question

So I recently spoke with someone from an organization that will remain nameless, and was basically told that if I didn't have at least $2,000 to start out with for investing, then I will never get any deals. My financial resources for investing are very limited, so that was a bit discouraging to hear. He was right to a certain degree, but I know that others have had success with little to no money spent. I'm sure it wasn't easy, but I know it is possible with some creativity and consistency. What are some things I can do for free or very inexpensively for now, until I have more financial means to find deals to do wholesaling? I'm already driving for dollars.

Dev Horn · Answer

Look, let me be brutally honest here.  You're told that the way to buy real estate with NO MONEY and NO/BAD CREDIT is to "wholesale".  Sounds good - get other guys to bring the money to the table and I'll get my cut!

Here's the PROBLEM:  Wholesaling is the FRONT END of the process, the one where we FIND the motivated sellers.  This is NOT a cheap part of the process.  This part of the process requires MARKETING which, other than the wasteland of Craigslist, is not free.

In some markets, it can easily cost $2K, $5K, and even higher in your marketing cost per deal.  This is something that makes this business challenging.  Acquiring prospects is not cheap for other small business people, and it is not for us in REI either.

So, do what can with what you have to get a deal or 2 - and then plow that money back into MARKETING...  this business takes money to make money!

Brian Gibbons · Answer

Hi @Bobby Valcin

I think partnering or birddogging is the way to get started.

What are you good at?

Why are you broke?

Are you willing to suffer or go without TODAY to get ahead to start a business TOMORROW?

REI is about entrepreneurship, starting and growing a business.

Guerrilla Marketing books from

http://www.amazon.com/Jay-Conrad-Levinson/e/B000AP...

have helped me.

Go to an REIA and ask the president to work for free for not money but experience.

Good luck.

Kim Handelman · Answer

There is tons of great advice here. I too am starting and strapped for cash. I've done some mailings and gotten one really great lead where the people accepted my offer and then didn't show up to sign the contract. Back to square one. I'm a list person (because I LOVE getting to check things off when I've done them). Here's a list you can print as a guide:

1. Go to your closest BP Meetup. The people you will me will be your guides and your sounding boards and who knows maybe future partners!

2. Open a bank account just for your REI funds. Get automatic deposit from your paycheck to put a small amount in every month and increase as you can.

3. Stop going to Starbucks, Marshall's whatever and if you go out with friends, drink only when the drink is bought for you : )

4. If you have good credit, buy a SFH or duplex with an FHA loan (I think it's 3% down) and house hack (read Brandon's book "No and Low Money down..... to learn how)

5. Listen to the podcasts every week and the new daily podcast right here on BP

6. Find a mentor or an internship. But do your homework. My first interview for a wholesaling internship the guy was drunk - I mean slurring his words and couldn't walk a straight line and it was 10 in the morning! When you find a good one, as mentioned above, bird dog, go to the court house for them get them coffe etc. You'll learn tons!

7. HERE IS THE MOST IMPORTANT ONE. TAKE ALL THOSE "YOU CAN'T DO IT" COMMENTS AND USE THEM AS FUEL! YOU'LL SHOW THEM! Go with the Rich Dad Poor Dad way of thinking - don't say "I can't", say "How can I?"

Eventually when you immerse yourself in this business and hang out with like minded people you will find your way.

Joe Villeneuve · Answer

What he meant to say, what he should have said, was that if "HE" (the "nameless organization") didn't have at least $2000, HE couldn't make money in Real Estate Investing.

Joe VilleneuveREcapSystemA2REIC

Adam Percento · Answer

My very first batch of marketing cost me around $15 (stamps, paper, envelopes)  I had some family members help me write 24 letters and sent them out. 4 days later 2 calls 1 of which was a very good lead.  like my mentors have said to me, don't let anyone tell you  you can't do it. JUST DO IT! wether it be 5 letters at a time to good leads or 1000. Just start doing something. even at that 5 at a time pace eventually something will come of it.

Mark Elliott · Answer

hi bobby. let me tell you a little story on how i got started. i had about $2000 to start with. i found a HUD house in a near by neighborhood and went to look at it. the listing price was $8500, but i thought i would look anyway. when i went to look at it, i noticed the house next to it was boarded up. i contacted the local municipality and they said that they owned it and had aquirred it thru tax repossession. i ended up looking at 3 houses that they owned like this, i bought 2 of them. the one i just mentioned, i bought for $1700. the other, i bought, later, for $500. both needed major work, and i did that using credit cards. fixed both houses, rented them both for a period of time, sold the one for a profit and the other i still own. you can get started on as little money as you have now, but you have to find the right deal. don't let the fact that you are starting off with little money stop you from getting into the business, you can do it

Bobby Valcin · Answer

@Ronald Perich Brilliant! Thanks.

Elizabeth  Colegrove That is very true. Creativity seems to be a big help. I'm good at recognizing good ideas, but not necessarily with coming up with them.

Elizabeth Colegrove · Answer

@Bobby Valcin

I don't have a creative bone in my body. I am the worst Martha Stewart you will EVER come. The one thing I have been very good at is adapting. Situations in real estate require "quick" decisions. So I have gotten really good at giving "quick" thoughts. Are business plan as changed alot based on situations that have arisen.

Elizabeth Colegrove · Answer

We had 0 down dowpayment money for our first house. We know many people who rented out their rooms. So if you bought a house with 0 down and everything finance, and than rented out your rooms you could live for 0 and be investing. Honestly I have learned if there is a will there is a way.

Ronald Perich · Answer

@Bobby Valcin One other thought I have been thinking about as a secondary market is to look in craigslist for landlords who are currently looking for renters, especially if they own just one or two properties. Maybe this latest vacancy is the last one they want.

Should I believe him?

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