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Updated over 9 years ago, 05/26/2015

User Stats

6
Posts
0
Votes
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
0
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6
Posts

ive got a real estate license, $10000 and good credit and I want to invest

Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
Posted

I know its not a lot of money and i don't have much experience. I wholesaled one property before and have since been trying to educate myself on investing. I would like to wholesale to raise more capital and have been looking into lease option deals. I am a member of my local reia but what other contacts should I be making? I guess what im trying to ask is if you had a license, $10000 and good credit... where would you start?  I greatly appreciate any and all comments. 

Much Success 

 Natasha 

User Stats

14
Posts
3
Votes
LeeArdis Brockington
  • Investor
  • Oxnard, CA
3
Votes |
14
Posts
LeeArdis Brockington
  • Investor
  • Oxnard, CA
Replied

I think it depends on what type if investor you want to be. if you enjoy wholesaling I would continue to do that and build more reserves. BP has some really good podcast about how much money to put into marketing which runs around 1,500 to 1,800 a month for consistent deals.

User Stats

6
Posts
0
Votes
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
0
Votes |
6
Posts
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
Replied

@LeeArdis Brockington thank you for the response and yes i would like to keep wholesaling. I'll check out those podcasts and start marketing!

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User Stats

17
Posts
6
Votes
Kyle Jorgensen
  • Residential Real Estate Agent
  • Chicago, IL
6
Votes |
17
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Kyle Jorgensen
  • Residential Real Estate Agent
  • Chicago, IL
Replied

I'm not familiar with the market in Virginia. However, here in Chicago with a license and 10k, that would make for a great start to rehab and sell a single family home. There are many neighborhoods which have a ton of inventory from 5k-30k, some even requiring a moderate rehab. With many recent comps showing the same homes selling for 80-130K after rehab. As a beginner I would recommend teaming up with an experienced flipper and learning the ropes, before going all in. With a 203K loan you'll have more than enough money to cover everything.

User Stats

83
Posts
17
Votes
Thomas Dionne
  • jacksonville, FL
17
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83
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Thomas Dionne
  • jacksonville, FL
Replied

What do you consider good credit? if its 720 plus I would do this but wholesaling in my area just isn't great, maybe yours is better:

1. Get more unsecured money via cards and credit lines, id stay away from installment loans until i saw a house I wanted for sure.

2. bid and buy the house cash. You'll own it unencumbered with very small payments at 0% interest for a year, giving you plenty of time to mess up without loosing anything. I only say this because i assume 10k houses suck in your area as they do in most and that IF you had 100k, you'd buy like a 50k house.

3. Find someone you know and trust that knows about fixing things (rehab) and have them look over what your doing.

4. get 3-4 quotes on all things you don't do yourself.

5. call a few Realtors with credentials over and see what they say it could sell for and then under rehab it.

6. When it all works out and you make money, don't go crazy, go slow. 

User Stats

6
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0
Votes
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
0
Votes |
6
Posts
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
Replied

i truly appreciate your response. Those kind of numbers are very enticing.  I've met a few flippers one in particular is a broker im considering hanging my license with. After some due diligence on their business practices ill see who if not the broker will be a good fit for me . thanks again! 

@Kyle Jorgensen

User Stats

41
Posts
20
Votes
Ray Jacobsen
  • Investor
  • Ashland, VA
20
Votes |
41
Posts
Ray Jacobsen
  • Investor
  • Ashland, VA
Replied

Natasha,

When you get a minute give me a call.
This house is near Philip Morris:

http://www.biggerpockets.com/forums/517/topics/187...

User Stats

6
Posts
0
Votes
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
0
Votes |
6
Posts
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
Replied
  • @Thomas Dionne 
  •  Thank you so much! The responses im getting let me know im on the right track. Yes it is 720+ . I spent this past winter working for a contractor with 30+ years experience in sfr so he is my go to guy. And yes a 10000 house around here comes with a bullet proof vest haha. 

User Stats

6,088
Posts
3,919
Votes
Brian Gibbons#5 Guru, Book, & Course Reviews Contributor
  • Investor
  • Sherman Oaks, CA
3,919
Votes |
6,088
Posts
Brian Gibbons#5 Guru, Book, & Course Reviews Contributor
  • Investor
  • Sherman Oaks, CA
Replied

@Natasha Crosby

Welcome to BP!

I train in wholesaling but also lease options and subject to and wraparound mortgages

Virginia is pretty strict and having a real estate license really does help you

I would start a marketing campaign toward houses with good school districts in medium priced houses

I like expired listings because they want to sell

I would knock on their door and give a free report and then follow up

Most expired listings are overpriced because They don't have a lot of equity

Instead of an assignment I use an option release because in many states assignments are frowned upon

So here are the steps

-Contact the expired listing seller

-Show the cost is sell by listing with an agent

-Compare that with lease to own in getting your sales price without a sales commission down the road

You can either act as a principal in the transaction by creating a lease and option with your LLC or sign a listing agreement and charge a fee to facilitate the lease to own

If you're acting as a principal, you take your option and place a memorandum of option against the property at county records

Once you have the house under contract you market for tenant buyers in that area that have 3 to 5% down

Either the tenant buyer or the seller or both will pay your option release fee

P.m. me if I can help you

Best wishes

Brian

User Stats

6
Posts
0
Votes
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
0
Votes |
6
Posts
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
Replied

@BrianGibbons 

Thank you! I have a lot of respect for you and your presence here on bp. I need to set up an LLC and start marketing. Thank you again for the road map Its exactly what i need.

User Stats

15
Posts
4
Votes
Dave Salcido
  • Real Estate Investor
  • Payson, UT
4
Votes |
15
Posts
Dave Salcido
  • Real Estate Investor
  • Payson, UT
Replied

Great answer @BrianGibbons

Here would be my proposal to the home seller: "Don't wanter seller, I am a licensed real estate agent. I'd like to offer you $5000 to take over your payment so I can get a qualified person to live in the house as a 'live in property manager'. They will make the monthly payments, take care of repairs and improvements inside and out at their expense. I will also personally make sure that the 'live in property manager' fulfills those responsibilities religiously and gratefully. After 10 years, the house will be sold  and the three of us will enjoy the benefits of the amount the loan was paid off and any additional equitable growth of the property."

This is a three way equity share. I would include monthly cash flow that the live in property manager would agree to pay because of tax deductions received. I would have contracts in place to protect the interests of all parties so everyone is safe, secure and profitable. Oh, and the live in property manager would bring at least $5000 to the table for the right of use and occupancy and equity.

User Stats

229
Posts
171
Votes
Dooreuhn Cee
  • Real Estate Investor
  • Chicago, IL
171
Votes |
229
Posts
Dooreuhn Cee
  • Real Estate Investor
  • Chicago, IL
Replied

Am I missing something here?  With good credit just buy house with a mortgage using the 10k as down payment.

User Stats

6
Posts
0
Votes
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
0
Votes |
6
Posts
Natasha Crosby
  • Real Estate Agent
  • Colonial Heights, VA
Replied

Thank you all for replying. 

@Dave Salcido the creative juices are flowing now! Thank you for the script. 

@Dooreuhn Cee im looking for strategies that i can pull cash out of fairly quickly. If you have any ideas im all ears. Thanks 

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User Stats

111
Posts
73
Votes
Cliff Mccue
Pro Member
  • Investor
  • Chicago, IL
73
Votes |
111
Posts
Cliff Mccue
Pro Member
  • Investor
  • Chicago, IL
Replied

@Kyle Jorgensen

 The flips that you are referencing are not as easy as you make it sound.  As a matter of fact, I would say those types of flips are more difficult than your flips in the Chicago suburbs.  There are way more things that can go wrong with the 30k flip.

  • Cliff Mccue
  • User Stats

    6,088
    Posts
    3,919
    Votes
    Brian Gibbons#5 Guru, Book, & Course Reviews Contributor
    • Investor
    • Sherman Oaks, CA
    3,919
    Votes |
    6,088
    Posts
    Brian Gibbons#5 Guru, Book, & Course Reviews Contributor
    • Investor
    • Sherman Oaks, CA
    Replied
    Originally posted by @Dave Salcido:

    Great answer @BrianGibbons

    Here would be my proposal to the home seller: "Don't wanter seller, I am a licensed real estate agent. I'd like to offer you $5000 to take over your payment so I can get a qualified person to live in the house as a 'live in property manager'. They will make the monthly payments, take care of repairs and improvements inside and out at their expense. I will also personally make sure that the 'live in property manager' fulfills those responsibilities religiously and gratefully. After 10 years, the house will be sold  and the three of us will enjoy the benefits of the amount the loan was paid off and any additional equitable growth of the property."

    This is a three way equity share. I would include monthly cash flow that the live in property manager would agree to pay because of tax deductions received. I would have contracts in place to protect the interests of all parties so everyone is safe, secure and profitable. Oh, and the live in property manager would bring at least $5000 to the table for the right of use and occupancy and equity.

    Man I love equity Share JV Agreements. Nice job Dave.

    User Stats

    2,704
    Posts
    1,686
    Votes
    Crystal Smith
    Pro Member
    • Real Estate Broker
    • Chicago, IL
    1,686
    Votes |
    2,704
    Posts
    Crystal Smith
    Pro Member
    • Real Estate Broker
    • Chicago, IL
    ModeratorReplied

    @Natasha Crosby first off; regarding flipping- ignore advice that you can purchase a property for less than $30k, do a moderate rehab for $10k and sell it for $130K.  That's a pipe dream.  Since you're a newbie w/ a real estate license, good credit and a small amount of cash, you should consider:

    • hang your license w/ a broker that specializes working w/ investors
    • become a master @ learning how to use tools available to realtors that are not available to the general public to source and analyze opportunities
    • find experienced investors looking for deals and partner up to learn
    • find an investor w/ cash but bad or no credit and partner up on a deal where you can leverage your credit and their cash

    the last bullet applies on any strategy.  flip/buy and hold/......  

  • Crystal Smith
  • 3126817487
  • User Stats

    95
    Posts
    59
    Votes
    Eric S.
    • Glen Ellyn, IL
    59
    Votes |
    95
    Posts
    Eric S.
    • Glen Ellyn, IL
    Replied

    I was in the exact position you are in about 13 years ago.  If I had to do it all over again, this is what I would do:

    House-hack! Use that 10k towards as small a down payment as possible on a multi-unit building that needs some work. These buildings are popping up as reposessions on the MLS all the time, and since you are owner occupied, you will have first opportunity to purchase, ahead of all of the investors who will bid up the pricing.

    Choose a property that needs work, but minor work.  Since you are living in the building, it will be much easier to self-manage and learn the business of landlording, which really isnt that tough once you get the hang of it.  Your goal should be to live for free-true hacking!

    In a few years, do the same thing again!  This is a great strategy to build wealth in a relatively safe way that ensures a low rate and 30 year money!  Your rents will only increase over time, and think of the return you will get on your money over 10 years!!!!

    Honestly, I wish I could revert to this strategy today.  

    Real estate is not a get-rich scheme.  

    User Stats

    95
    Posts
    59
    Votes
    Eric S.
    • Glen Ellyn, IL
    59
    Votes |
    95
    Posts
    Eric S.
    • Glen Ellyn, IL
    Replied

    I meant get-rich-QUICK scheme.  Hopefully, all of us will get rich over time!

    User Stats

    67
    Posts
    13
    Votes
    Xavier Y.
    • Investor
    • Chicago, IL
    13
    Votes |
    67
    Posts
    Xavier Y.
    • Investor
    • Chicago, IL
    Replied
    Originally posted by @Crystal Smith:

    @Natasha Crosby first off; regarding flipping- ignore advice that you can purchase a property for less than $30k, do a moderate rehab for $10k and sell it for $130K.  That's a pipe dream.  Since you're a newbie w/ a real estate license, good credit and a small amount of cash, you should consider:

    • hang your license w/ a broker that specializes working w/ investors
    • become a master @ learning how to use tools available to realtors that are not available to the general public to source and analyze opportunities
    • find experienced investors looking for deals and partner up to learn
    • find an investor w/ cash but bad or no credit and partner up on a deal where you can leverage your credit and their cash

    the last bullet applies on any strategy.  flip/buy and hold/......  

     Those were some great pointers that you gave Natasha. They really resonated with me because this is what I'm currently trying to do. I have little experience, but have the time, effort, drive, and motivation to (and great credit) to put forth on a deal with an experienced investor. I'd like to connect with you to see if we can work together on a deal in the near future. 

    User Stats

    3
    Posts
    0
    Votes
    Alex Love
    • Oak Lawn, IL
    0
    Votes |
    3
    Posts
    Alex Love
    • Oak Lawn, IL
    Replied

    Eric S. - this is great advice and is something I'm currently working on. I'm in Chicago, from the Southside and am looking to network and learn more about the business. Thanks!

    User Stats

    434
    Posts
    185
    Votes
    Scot Howat
    • Investor
    • Hoffman Estates, IL
    185
    Votes |
    434
    Posts
    Scot Howat
    • Investor
    • Hoffman Estates, IL
    Replied

    If you want to wholesale I'd recommend a few podcasts

    Sean Terry - Flip 2 Freedom

    Justin Colby - Science of Flipping

    Start there and see if you really like it, it's a tough way to get started though.