How to get started with minimal capital

[Steve Haake]

What is the best way to get stated and achieve success in real estate investing with minimal capital. 

[Randall Alan]

Well.. in short, there is not much a free ride in this arena.  If you can't beg / borrow the money, you will probably need to do things that require minimal capital to build up your capital. The easy-out answer is to say to work and save up the money... but that is slow and less opportunistic than wholesaling. Wholesaling is more of about marketing to find deals that you then turn around and sell to an investor with money that will be willing to pay you a finders fee for your effort.

  You seek out deals though whatever means appeal to you (snipe signs, cold calling, buying a list of non-owner occupied homes looking for the ones that want to sell, driving around looking for properties, working with attorneys, calling people that are going into foreclosure,  or working other wholesalers to learn the trade, etc).

They key is that you have to find deals that have a lot of 'meat on the bones' where there will be sufficient equity in the deal to cut you in, plus your investor says, 'Wow, thats a great deal."  I have bought 3-4 properties from wholesalers, and the typical one has about $10,000 in it for the wholesaler, and about $30-60k in it for me in equity.  So hopefully you see how both those numbers are motivating.  You get $10k for finding the deal, your buyer sees $50,000 they have in equity at closing.  The secret is that in that 50,000 they have to be able to get it to the level they need it to be to do what they want with it... (rehab It to rent or sell - presuming it needs those things.

You write up a contract with the seller, putting as little as $100 down to get a 30-60 day lock-up on their property, then you go and try to market that property to a potential buyer.  It involves learning how to price a home, and "encouraging" the seller to price their home at a price that is respective of its condition, etc.  Often it is dealing with sad situations... divorces, near-bankruptcies, deaths of spouses, etc.  One property we bought was from a seller whose husband had passed, another was one that was going into bankruptcy... so its definitely not all sunshine and rainbows! Once you find your buyer, you do an assignment, which is a single piece of paper that goes to the title company with your sales contract that says, 'Pay me my finders fee when this deal closes".  When the deal closes, you get paid.

Another low-cost in can be tax liens on properties, where you pay the taxes, and there is a process by which eventually you can lay claim to the property.  That's not my field, so won't try to describe it more than that, but others might.  That takes paying the taxes on the property... sometimes hundreds, sometimes thousands, and then the property owner always has the opportunity to redeem the property by paying you back with interest... so you can make some money there too... but probably not as fast as wholesaling.

Hope it helps!

Randy