Starting out BROKE

[Daniel Dadzie]

Greetings everyone.

The name is Daniel. I just finished attending a 3 day REI course (FortuneBuilders). Im working as a barber in Fremont, CA, and my money is tight. My credit score is 620. I tried going to 'epicfastfunding.com' , but i was declined because of a 2000$ loan for a car that got repossessed in 2010. I have no idea what to do. Can anyone give me any advice?

Thanks.

[Clayton Sneider]

It doesn't sound like you are in a financial position to invest in real estate at this point. I could be wrong because I don't know the details of your financial situation. But if you have no money, don't make much money and had a car recently re-possessed it sounds like you really are broke.

The first thing I would do is work on getting a higher paying job. I can't imagine you make much as a barber. There has to be something that you can do that pays better.

Then work on drastically cutting your expenses. Cut up your credit cards if you carry a balance on them, and start paying them off. Your rate of return on paying down credit cards will probably beat anything that you could do in real estate. Sell anything that has value that you don't need. Cancel your cable subscription if you have one. Cut out any un necessary expenses. Ride a bike to work if you can. Don't eat out as often. Never buy drinks at a bar if that is something you do.

In other words: Make more money and save more money.

This phase will probably take you a year or more...

Then, build up an emergency fund, maybe six months of expenses.

After you are out of debt, and have saved a bit of money, then start thinking about investing it.

It is possible that you could take a short cut around all of this if you were to secure zero down financing and start flipping houses or something. If you have significant construction experience that is a huge plus. However, it would be very difficult and risky for somebody with no money. What if something ends up costing a few thousand more than you anticipated and you can't make the loan payments? You would be completely screwed because you have zero working capital.

If you could find a partner that is willing to be the "money guy" and let you do all of the leg work, that would probably be the safest bet for you. However, if you have zero real estate experience, good luck finding somebody who will give you $.

I didn't invest in real estate until I had literally so much money saved up that I had to invest in something, and it still stresses me out thinking about all the "what ifs". I can't imagine trying to do it being completely broke.

My suggestion is to keep real estate in mind, keep learning, get your financial situation in order and then in a couple of years pull the trigger.