Where do I start when I have no $$$

Question

Hello,As a disclaimer, I have not read any discussions nor watched the Overview Video on how to get started in real estate. Now with that being said, where should someone start who has no capital, a 650 credit score and DTI ratio too high to purchase a home start? What should be the first thing I do besides raise credit and lower DTI ratio? What should I study, ready or focus on?

Nick G. · Answer

@Patrick GrayDepends, do you want to go Hard Route #1 or Hard Route #2?In all seriousness, whatever you do, it's going to be hard work, so you need to pick whichever path suits you best. There are many paths, some are more common than others, but all rely on hard work, discipline, and being in it for the long haul.Here's what I would do (and, uh, what I actually am doing):Step 1: Listen to the Bigger Pockets podcast. Go on iTunes, subscribe, "view all episodes," and download that sh*% all the way back to Episode 1, and put it on a device. I chose a $14 SD card off Amazon that lives in my car. Listen every day, when you're in your car, when you're falling asleep, etc. It, along with anything else you choose, will be your daily motivation. You could also read some energizing books, for me those were Think and Grow Rich and Rich Dad Poor Dad.Step 2: Write some goals down. Now that you've heard a few episodes, know the possibilities and got some real-life real estate inspiration, write down some goals. Write them. Down. Written. Got it? Use cardboard and a crayon, it doesn't matter, just write them down. Review them every day at least once, I prefer doing it when I wake up and again before I fall asleep.Step 3: Get your personal finances in order (I really had to do this one, no shame.) Hope over to MrMoneyMoustache.com (yes, I know, but trust me) and start reading through his posts in your downtime. Grab a couple success/finance books and flip through those. My favorites are The Richest Man in Babylon, and I hear The Millionaire Next Door is also awesome.Step 4: Network. It may take some time, but if you can nail down Steps 1-3, you're wayyy better off than about 99% of the population around you. While you're handling the first three steps, keep an open mind and try to get out there and meet other people who are doing what you want - particularly the ones who are smarter than you. BP is a great place to start. Go to your dashboard and hit that green "Search Members" button to start finding other people you can talk to and learn from. As soon as you have Step 2 done, you should be really working on this one! The reason this is after the personal finance step for me is because I believe in setting yourself up to be able to take opportunities when they arrive, which to me means making sure your personal finances aren't holding you back as you really start getting out there talking to people.Step 5: Learn. There's a reason it's at the bottom of this list. Seriously. If you 1. are motivated, 2. have goals you are focused on, 3. have your finances in order, and 4. know people in real estate who are smarter than you, like you, and trust you, then you have the most important ingredients for success in this business. You can know everything there is to know about real estate, and it won't do crap for you (or last any amount of time) unless you have the above things taken care of. *** I tried to do this step first, and now I'm having to go back and do all of the other steps because I didn't realize this.Step 6: Execute. This is actually a false step, because if you've played it smart and kept your nose to the grindstone, you'll probably end up actually doing this naturally somewhere between Step 3 and Step 5. There is probably a wide range of opinions out there about the order of the steps, but this is my personal belief and it's what has worked for me. It let me go from a broke 18 year-old college dropout to owning my first property at 22 that I've made about $100,000 on since buying it last year. It's not the best success story ever, but it makes me proud, and it's a meaningful milestone to me of a grand plan I have.Good luck to you!

Jay Dean · Answer

Set for Life by Scott Trench. Perfect book for you in my opinion but only if you are convicted to giving his advice real consideration and putting ideas into action long term.

Nick Cuttonaro · Answer

@Patrick Gray - Not going to sugar coat this, you need to get your bankroll up. It's a simple formula to establish stability so that you can pull the trigger when you're ready. If I were in your position, I'd get a job in real estate to become as knowledgeable as possible so you're both competent and confident to do your own deals when you're ready. Earn and expand your income while learning the industry.The only thing to focus on now is increasing your income to pay down debt, establish reserves, and allocate those funds toward investment when you're ready. Be frugal and stay hungry. Good luck!