Still haven't closed on a prop & frustrated

Jason Rodriguez · 2017-12-04T11:24:08-08:00

I love this website and all the information it contains, but now being on it everyday and soaking up all this different knowledge has become overwhelming and frustrating, especially when you just want to close on that first deal to get the experience that sitting on a computer can't give you. It all looks & sounds good but when it comes down to the wire, i have to ask myself every morning how in the world is a poor college student going to get thousands of dollars to get this RE flipping venture underway. I know there's different means on getting the capital to start but so far from my experience it's close to winning a scratch off ticket unless you know someone personally that has money to invest (i wish). You can keep asking and asking, people will sound interested but then the total outcome will still be 0 no HIT. With something involving real estate the knowledge is priceless on the internet which means you can stuff your brain until it hurts. Then have your mind play tricks on you and start making things more difficult then it should be (overwhelmed).Then the eagerness kicks in but you have no money and the only way is to depend on finding someone to believe in your vision willing to give you whats needed to actually get it done (frustration) So what am i to do now? I guess this is me venting on my current situation.

Lindsey Crawford

Springfield, TN · Member since 2017 · 17 posts · 8 votes

8y

Hey Jason,

I'm in a situation similar to you. I have seen/read all these things about using everyones else money to fund your projects. I'm not going to say it's impossible but it certainly isn't as easy as it sounds. Now, once you have some numbers under your belt and a proven history more doors will open and investors will be more willing to work with you. With this as my thought process I have decided I must fund (at least the down payment) my first project. Hopefully the profits from that will launch me to where I want to go. This what you do have on your side....time. Even though your capital challenged, you have time to change that. Many that get in the game late with little capital face a steeper hill. All in all....GRIND!!! Make your capital. You are the only one that will make this work. Tuck the chin and lean into it.

Lindsey

4 Reply

Account Closed

Roselle, NJ · Member since 2015 · 75 posts · 16 votes

8y

Hi Jason,

I'm also in a similar situation as you but you said it yourself, WHO do you know that has money to invest. Start there!

Reach out to Investors here and on Instagram and buy them lunch and pick their brains. Show them some of the properties you are looking at and show them some of the analysis you do. If you get one under contract see if you can partner with them or even wholesale the deal cheaply to be able to go through the process with them and build experience and some capital along the way. This is the strategy I'm going with at the moment.

Your Net Worth is in your Network. Attend Meetups and surround yourself with like minded people instead of just being in front of the computer all day soaking up repetitive info.

Hope that Helps,

Pierre

3 Reply

Jason Rodriguez

OP

Brooklyn, NY · Member since 2017 · 22 posts · 7 votes

8y

I appreciate the insight, very encouraging words. Can anyone maybe add some other points to value that has been in the same predicaments and beat the odds?

1 Reply

James C.

Rockledge, FL · Member since 2016 · 493 posts · 427 votes

8y

Jason,

I'm reminded of two things...

One: Someone once asked Ray Charles how to get to Carnegie Hall. His response "practice, man, practice"

Two: is something along the lines of "if you don't know where to start, throw a rock up in the air. The next person who walks by where the rock landed say 'you're the first person to walk by the rock'"

You've got 9375 voices in your head saying "how", "you can't possibly", "that will never work". You need to ignore those voices and go do something. Go find a deal. I absolutely guarantee you'll screw it up. Probably the next 10 too. Get them out of the way, and learn from every screw up. Eventually, you'll find one you won't screw up too badly and you'll close it (or wholesale it, or whatever your exit strategy is)

When I started in Real Estate (as an agent) they would send buyer calls back to my desk and I would walk away. Literally let the phone ring until they transferred it to another agent.

I threw a newspaper route from 4 to 6 AM, in the office by 7. Worked until 5 PM, taught night school until 9:30 PM ish. Went to bed and did it all the next day, for 3 years until I had enough of a client base to give up the newspaper route. Kept the teaching, because I liked it. The newspaper route became my farm. Made some good money on the farm, could have made more had I been smarter. Could have made a bunch more money as an agent, but was young and dumb. I did make a decent living, and had a bunch of fun.

I bought my first property (Condo) 4 years after becoming an agent. From there, bought a bunch of NPN, and bought (house hacked) a 2 unit in year 5. Lost everything in divorce in year 6. Just getting back into REI, but much smarter this time.

It doesn't happen overnight, it doesn't happen by wishing, it doesn't happen by studying. It happens by willing to be wrong, by willing to learn, and by strapping on a set of big old brass ones until you get it right.

Put a bit more impolitely: Pull off the Huggies, pull on the pants and get to work.

Good Luck!

Jim

8 Reply

Jason Rodriguez

OP

Brooklyn, NY · Member since 2017 · 22 posts · 7 votes

8y

does anyone have any tips for me to start in REI with other people's money as a college student, with no prior experience?

0 Reply

Richard Beatty

Boston, MA · Member since 2012 · 100 posts · 54 votes

8y

First thing is to become familiar on what you want do. Flip,buy/hold etc. Read, Read,Read and while you are gaining knowledge find a job save and live below your means. Investors or anyone will not give you money if you do not know what you are talking bout.Check out Scott Trenchs book Set For Life. Best of luck.

1 Reply

Ray Slack

Investor · White Haven PA · Member since 2014 · 363 posts · 221 votes

8y

The only way you are going to get someone to invest is to have a great property where the numbers make sense. Run the numbers and make sure it's at least a 20% cash on Cash return.. Meaning after all expenses the deal is netting 20% return on the money invested. Then take the deal to your local Real Estate Investing Meet up.. Or Post it here and offer it to an investor.. The most common arrangement is you bring the deal and do all the work and the investor puts up all the funds for the purchase closing and renovations. then at Closing the investor gets all him money back and the profits are split.

When I was young and working with investors I would also promise the investor would make at least 10% return on his money.. Meaning is the deal produced a return of 25% I would get 12.5% and the investor would get 12.5%.. If the deal only ended up producing a 15% return the investor would get 10% and I would get 5%.

When you make consistent money for an investor they will trust you more and more.

3 Reply

Gabriel Amedee

Investor · Miami, FL · Member since 2015 · 379 posts · 330 votes

8y

Why not make more money? I wouldn't trust someone with my money if they have ZERO track record and apparently zero funds as well. Sounds like a major liability and more of crap shoot. How many people fall into your same parameters? There's tons of people waiting on the sidelines for a hand out. Nothing shouts "pick me" when investors look at you. To me the answer to this is simple. Make more money. I graduate next semester but that hasn't stopped me from being a full time realtor and assigning contracts along the way. Now I can go to events and meet ups and speak so confidently about what I do that opportunities end up falling on my lap. Not saying it's easy but it is really simple. Get yourself a commission based job. Be exceptional at that job. Get paid exceptionally cause you're exceptional at that job. Use that money for REI. Partner with people you've met along the way. If you're good at your job they'll be calling you asking what they can do to work with you. Hope this provides some insight. Not much of a sugar coater but you're more than welcome to reach out for more help. Regardless happy investing!

3 Reply

Brian Armstrong

Real Estate Agent · Fort Worth, TX · Member since 2017 · 22 posts · 4 votes

8y

When I hear you want to use other people's money - I recommend taking out a hard money loan.

A hard money loan would cover not just the cost of the home but also a good portion (usually about 70%) of the rehab needed. A credit score of 680 or better is required and you need to prove you have funds on hand for close, plus 1/2 the rehab and around 6 months of payments. Of course the credit terms will vary per each lender...those are just rough figures.

1 Reply

Christopher Kramer

Arlington Heights, IL · Member since 2017 · 8 posts · 4 votes

8y

I totally agree with you when you talk about the learning aspect of the business. I was and still am stuck in analysis paralysis, BUT you have to remember what your ultimate goal is and then you can filter all the info into actionable steps. I have spent almost 2 months learning as much as I could and along the way taking action, such as marketing, networking, and learning the legalities by partnering up with an attorney (worth their weight in gold). Mind you, I have NO MONEY and I am driving Uber and relying off of family to sustain myself as well as my startup. I FINALLY just put my first wholesale property under contract and was so happy that I accomplished just that, now I am thinking I don't even have a good deal but there's plenty of opportunities if you truly work to find them. It is ALL a learning experience, and if you learn and experience sooner rather than later, then your on your way to running a fruitful business. Don't let your ego win, stay positive. (This is coming from a newbie wholesaler's point of view fyi)

1 Reply

Christopher Kramer

Arlington Heights, IL · Member since 2017 · 8 posts · 4 votes

8y

Originally posted by @Jason Rodriguez:

does anyone have any tips for me to start in REI with other people's money as a college student, with no prior experience?

Usually new REIs start with wholesaling because it requires the least amount of money to get started in investing. Then move to fix n flips, then buy and holds, then lending. OR you could become a real estate agent and earn a commission while learning transactions from a representation point of view. Also, having a license and access to the MLS will give you a HUGE leg up. Hope that helps.

1 Reply

Anthony GaydenPro Member

Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes

8y

@Jason Rodriguez

I know it can seem discouraging especially in an expensive market such as NYC and starting off with little money. The first thing I would suggest to you or anyone else getting started is to work on getting some money.

In order to make my first investment purchase I had to pay off my debts, build my credit, and save every penny possible for well over a year. It was not easy.

I'm a strong believer in getting your money right before you start investing.

Podcast Guest on Show #21

0 Reply

Cara Lonsdale

Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes

8y

@James C. I really enjoyed your post. It was comical and encouraging for people who fit this criteria of starting out. So, thank you for your contribution.

@Jason Rodriguez Here is a bit of a reality check for you that may sting a bit at first.. NO one is going to hand over their money to an unproven novice with no skills, insight, or experience. No One.

SO, what that means is that you have to do your first deal on your own. This can be done with the use of creative ideas. One of the most common on this site is house hacking, where you purchase a home for yourself with the intent to rent it out after the required occupancy period has been met, or a 1-4 multi-unit that has tenants for the other units.

You have to start with good credit and A Job (it doesn't have to be a great paying job, just SOME income). Do you have credit at all? If not, START THERE. Build a credit profile.

Then, connect with a local lender and get pre-qualified. If your income is low, then a multi-unit may be the way to go as you are able to include up to 75% of the rental income to help you qualify. Ask the lender about first time home buyer programs that offer down payment assistance.

When it comes time to write an offer, request that the Seller contribute toward your closing costs. The lender may limit their contribution to 2%, so be aware of the limits before asking the Seller for it so you don't leave any money on the table.

As an alternative, the Lender can sometimes cover the cost of your closing costs by bumping up the interest rate slightly. This is not preferred, but if you don't have the money and need it to be covered, this is an option.

There's one idea. Another idea would be to start in land. There is a company (Land Academy) that offers alot of resources for getting into land. While their full program is VERY expensive (and I am not suggesting you pay for the program), there are alot of free resources and ways to learn and get support enough to get you started. In fact, I would suggest starting with the forums there. I have included a link for you. These are totally free and contain a ton of useful and free info. Land has a smaller cost of entry to get into, and if you could buy a piece of land from someonefor $100 and turnaround and sell it for $500, you could build your seed money to move on to bigger RE projects.

https://www.landinvestors.com/forums/

BTW, I have no affiliation with Landvestors or Landacademy. I just used their free resources and forums to guide me through a land purchase project I was working on.

I hope this helps!

4 Reply

Shawn Clark

Investor · Middle River, MD · Member since 2017 · 191 posts · 127 votes

8y

Originally posted by @Jason Rodriguez:

does anyone have any tips for me to start in REI with other people's money as a college student, with no prior experience?

Find a deal. Simple as that. Or find someone to work for.

It's not magic. You can't start from nothing, with nothing, and do nothing. Something has to give. Bring money, or bring the ability to find a deal, or do the work along side someone else.

1 Reply

Mark Jones

Rental Property Investor · Indianapolis, IN · Member since 2017 · 104 posts · 47 votes

8y

@Jason Rodriguez I believe even more important than building your credit or a source of funds is gaining experience. Get a job with a property manager, local flipper/investor, get your license, etc. I'm guessing as a college student, you don't have tons of time. Get something part time working to gain experience. This will also help you narrow your focus of what you want to do or not do when you start investing yourself.

1 Reply

Ian WalshBusiness Member

Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes

8y

Closing your first deal is not the answer here. Don't rush into this business. Learn your market and learn to market. Go to local REI events and meet the players. Money is not hard to get your hands on if you have a good deal. Don't do a deal to just do a deal. You will end up in a bad one, burn yourself out and never want to invest again. It is all about making money. Don't ever lose sight of that. ONLY buy profitable deals or don't do the deal.

0 Reply

Ned CareyPro Member

Moderator

Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes

8y

@Jason Rodriguez

No, your mind is not playing tricks on you. IT IS HARD.

I think part of the problem is you have unrealistic expectations. I don't fault you for that because so many people say it is easy, it is simple, there is no risk and you can do it with no money. You have been misled. Most people in real estate never do a deal with no money of their own.

After I had been doing this business for 8 years I did 2 deals with other peoples money. A private lender funded them 100% and I walked away from the settlement table with money for repairs. Oh wait a minute, the repairs were more than expected so we still had to come up with some of our own money.

It took 8 years for me to do what you want to do ! (OK I am a slow learner) I would guess it takes on average 6 months for a new investor to do a deal. If you are trying to do your first deal with no money, it would easily take longer.

So what can you do NOW.

Adjust your attitude, It can come quickly but probably won't. You have to persist.
Start saving money. If you cannot live within your means now you probable won't when you have more money.

While you are saving money you can start doing the following NOW

learn the business, you need to learn the strategies,
Learn how to evaluate a deal,
Learn your market. This is often a weak point for new investors. The people who know the market best tend to get the best deals.
Build your network, Go out and find other investors to network with. Go to local investing groups.
build your network of professionals. every investor needs lawyers, accountants, contractors, agents etc.
Learn about different types of money and how to get it. What are lenders expectations and requirements. Check out multiple types; local Hard money lenders, national Hard money lenders, banks, mortgage brokers etc.
Consider a job in the industry, you could be an agent or perhaps an agents assistant, You could be an assistant to a successful investor. We have people who change locks for us, mow lawns, turn off water, etc. I know a commercial agent who does multi-million dollar deals. He started by working for banks servicing their vacant foreclosures.
Keep looking at deals, not a dozen, look at hundreds. Somewhere along the line you are going to find a deal that you can pull off and make work. In the mean time you are learning your market while looking.

Good luck to you

5 Reply

April Crossley

Investor · Reading, PA · Member since 2015 · 102 posts · 119 votes

8y

People way over complicate REI for newbies. In this market— people are dying for food deals. Tripping over each other to find them. What’s happening to you is overwhelm. I don’t like when newbies get sucked into the rabbit hole of bouncing around forums on bigger pockets all day. All it does is make your head spin. It’s not as complex as everyone makes it sound. Especially in this insane market where everyone dying for more deals. It comes down to two things: 1. Find deals- if you can’t find deals, no one is going to take up with you or give you funds. If you find a deal, anyone will JV with you or buy that deal from you. This is how I started. Zero funds, took the deal to an experienced investor.. did a JV split. Don’t kid yourself tho- the more experienced investor brings money and more knowledge to the deal so they aren’t going to do a 50/50 split with you. Take the experience anyway as it is priceless. 2. Find people that actually do deals. Why? Revert to question 1. Where are the people actually doing deals? They are buying cash at sheriff sale and tax sale. They are buying cash at auction. They are at meetup groups looking for more people to bring them deals. Find deals. Find cash buyers. That’s all you need to know. If you can learn about those two things.. you are set. My advice— stop reading so many books and forum threads and take a no BS class or course on deal finding tactics and finding cash buyers. Master those two things and you will start doing deals. You will learn a ton by jumping in with an experienced cash buyer to guide you. If you find a deal and they turn down a JV with you asl them to be brutally honest with you about WHY. A lot of times it’s bc it really isn’t a deal at all. People bring me “deals” all the time.. and they aren’t deals. Don’t be offended when they tell you it isn’t a deal. Just learn what would make it a deal.

4 Reply

Jason Rodriguez

OP

Brooklyn, NY · Member since 2017 · 22 posts · 7 votes

8y

Originally posted by @April Crossley:

People way over complicate REI for newbies. In this market— people are dying for food deals. Tripping over each other to find them. What's happening to you is overwhelm. I don't like when newbies get sucked into the rabbit hole of bouncing around forums on bigger pockets all day. All it does is make your head spin. It's not as complex as everyone makes it sound. Especially in this insane market where everyone dying for more deals. It comes down to two things:

1. Find deals- if you can't find deals, no one is going to take up with you or give you funds. If you find a deal, anyone will JV with you or buy that deal from you. This is how I started. Zero funds, took the deal to an experienced investor.. did a JV split. Don't kid yourself tho- the more experienced investor brings money and more knowledge to the deal so they aren't going to do a 50/50 split with you. Take the experience anyway as it is priceless.

2. Find people that actually do deals. Why? Revert to question 1. Where are the people actually doing deals? They are buying cash at sheriff sale and tax sale. They are buying cash at auction. They are at meetup groups looking for more people to bring them deals.

Find deals. Find cash buyers. That's all you need to know. If you can learn about those two things.. you are set. My advice— stop reading so many books and forum threads and take a no BS class or course on deal finding tactics and finding cash buyers. Master those two things and you will start doing deals. You will learn a ton by jumping in with an experienced cash buyer to guide you. If you find a deal and they turn down a JV with you asl them to be brutally honest with you about WHY. A lot of times it's bc it really isn't a deal at all. People bring me "deals" all the time.. and they aren't deals. Don't be offended when they tell you it isn't a deal. Just learn what would make it a deal.

Great post!!... Thanks @April crossley

So here's the thing, i may have some deals in my arsenal from doing drive for dollars in the upper NEW YORK area when visiting one my friends. You mentioned doing a JV deal with a cash buyer and that route sounds pretty good. But how do i go about giving details on the prop to a buyer without having that person just handle the deal themselves than just blocks me afterwards? Is there any paperwork agreement i need specifically for NY state?

0 Reply

Still haven't closed on a prop & frustrated

Still haven't closed on a prop & frustrated

Most Popular Reply

20 Replies