High cost market with little to no money, how do you start?

Question

Most of what I have seen and read on bigger pockets has involved people with money from someplace like California moving/investing in a place like the Midwest where your money goes further or people from a market like the Midwest staying in the Midwest. I have yet to see anyone with a low income become a success in a market such as San Francisco, California or Austin, TX. Has anyone here done this? Started with little to nothing and made something of yourself in real estate in an over priced market like Austin, TX? If so how does one with little experience and no reputation go about doing that?

Jay Hinrichs · Answer

@James Lindsey  Well I guess I resemble your remarks... I grew up in Cupertino and started in RE with absolutely no money living at my mom and dads home.

and this is how we use to do it.. you get RE license and work for a broker and learn the business you make commissions as you go along you meet all sorts of deal makers etc. I never once went to a REIA meeting although I bough carlton sheets and many other sales and marketing programs over the years that helped me tremendously..

first thing I did was buy a home to live in in Milpitas sold that made some good money then bought in Palo alto sold that 5 years later and Made HUGE money.. so you see I did it buying in the right places at the right time.. and I am not alone the big money is made in appreciation .. then I bought in the Napa valley and sold and made huge money.. at least compared to mid west standards.. all tax free... etc etc. all the while my earnings were going up as a top producing agent.. it was not until I was about 10 years into being a top producing RE broker that I branched out to investing and HML.. and other things that make far more money than buying low end rentals.. LOL.

So if I was in Austin I would start by getting a license and at least get with folks that are doing deals.. and they expect you to get paid for your effort.. No working with someone who is going to promise to teach you but not pay you... etc etc.

So I think you can count me as someone who lived in high priced market started with ZERO money and made some nice coin along the way.

Russell Brazil · Answer

Learn to live well below your means and save as much money as you can.  I spent most of my twenties living in a very small studio, in a sub par neighborhood because my rent was only $400 a month and I was able to pay off all my debt and save a ton of money.  I went from a net worth of about negative $50k at around age 25 to living a very comfortable life now at 36, not by knocking an investment out of the park, but by living below my means and saving and investing every dime. This in the Boston and Washington DC markets, both of which are quite expensive.

Steve Vaughan · Answer

When I have little or no money - the one place I go is to work.  Work and save, save and work some more. Eat cheap and stay out of restaurants, coffee houses, movie theaters and restaurants unless its your 3rd job.  Get on the business end of a lawn mower, leaf blower, sponge & mop, whatever.

While you are working and learning, locate an opportunity and bring it to your next meetup to be analyzed and shared with an ethical pro.  Best way I know of to hook up with a partner/mentor/helper. Good luck!

Mike Hurney · Answer

@Bobbi Martinez Your image looks good for 50.

My advice on the above question...

Go back to the Guru and do exactly what they say to do to make money and do not give them any more until you've recouped the original investment in them.

Too many "investors" are reluctant to do what it takes and blame the guru.

Case in point:

Make two offers a week. (that's too hard and they may do it once, get rejected and not do it again)

Everyone on this Forum that's made money in Real Estate knows what it takes and does the hard, smart work to get ahead.

Flipping, Wholesaling, Finding killer deals - It's a numbers game!

Like Nike says, Just Do It!

Jared Watson · Answer

I thought you were coming to join with me? I'll get you there

Matthew Vitlin · Answer

When people talk about living comfortably, they generally mean having enough money to get what they want while not drowning in debt.  So the easy way to look at it is that if you don't feel comfortable, either increase your income, decrease your debts, or both.  While it seems obvious, I know plenty of people who just rack up huge credit card bills or get nice, new cars and then wonder where all their income is going.

As far as REI, it comes down to doing your homework and taking your shot.  Figure out whether you can afford to quit your job and be a full-time flipper/renter or if you need smaller scale projects that you can do on the weekend.  Do you have friends/family that can front you money, or do you need to partner with an investor?  Do you have good credit, do you need financing?  You need to be able to walk into a meeting with a loan officer or an investor and explain why they should give you money AND why this deal is a good deal.  I think a lot of the success in REI comes down to preparation, so just prepare, prepare, prepare.

Bobbi Martinez · Answer

Hi Russell,

I loved the advise you offered in the post re: high market with little or no money. Question, how would your advise change (if it would) if you were speaking with a 50 yr old in the same situation as the young man who presented this question?

I am 50, made a lot of mistakes in my youth...I guess you could call me a late late...late bloomer.  I have virtually no savings, tons of school loans; but, I am paying them down while saving about $800 per month.

I'm in Southern Ca and recently joined BP (after blowing thousands on a guru program) in hopes of learning what steps to take in REI to change the second half of my life.

Again....would your advise change or remain the same?

In advance, thank you so much for time and feedback! :)

Bobbi

Jared Watson · Answer

2 months buddy, come work with me in 2 months, I should have 6 houses. Give me everything you got everyday and I will get you to a place you want to be

Chet Mazur · Answer

If you're able to find a good deal, I believe the $$$$. On my current deal, I have 0 cash in the deal, just sweat equity.

Good tools (software) helps a lot.

James Lindsey · Answer

@Jared Watson  I do plan to get together with you next weekend. Hopefully we can help each other out but I also know you are growing your business wich requires a lot of house flipping. Don't get me wrong I totally admire what you're doing. It takes a lot of guts. I'm also still trying to see what other opportunities are around that might be more cash flow then house flipping.

High cost market with little to no money, how do you start?

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