Can I start investing with no money

Question

I am a newly licensed real estate agent in PA, and I am looking to start investing in property. I have decided that I want to start with buying a property to rent out. However, I am currently in the process of purchasing my first home that I plan to live in. So since I am getting a mortgage for that property, is there any way for me buy another property or should I wait some time? Is there any other we for me to start investing other than trying to borrow the money from an institution? Just looking for some ideas on how I should get started. I appreciate any insight or advice.

Salvatore Lentini · Answer

@Dorian Redden - not impossible.  I did it and I'm not the exception.  I started with zero $ by wholesaling.  Wholesaled a few, with one of them being a whale of a wholesale deal.  I used that big assignment fee to buy my first fix & flip with 90% private money financing from the lawyer I had draw up my wholesaling contracts a year prior.  Profited about $35K on that fix & flip and used that money as down payment on a "fix and keep" rental.  Used the cash out refi money to buy #2.... 7 years and 127 rentals later I'm about to close on my 4th $3M+ commercial property.  Not saying it was easy and there weren't setbacks and there were definitely many moments of doubt along the way but.... it can be done.  I know many others with stories of success in real estate that each took their own unique path... so don't think there's one magic way to achieve your goals.  Your path will be unique to you but you can learn from others to help develop that path.

Ronald Allen Barney · Answer

In most people's cases starting out with no cash is going to make it near-impossible to invest, however, being a realtor puts you in a special position to be able to find deals for other investors, and part of your routine realtor's day can be combing the MLS for its hidden gems.  You probably know the ones I'm talking about, where the listing agent was dumb and put wrong data in there so it ended up in the wrong search template (and he's wondering why it's sat on the market for 40 days now), properties like that.  You can also find sellers willing to sell off-market at a discount for a faster easier process.  Those kinds of deals you can find for investors that have cash to put into them, and in lieu of a flat finders fee or a commission, you might be able to negotiate a percentage of equity on the deal.  In that way you just "invested" (your time and skill in this case) to get a piece of someone else's door(s).

Account Closed · Answer

Buy a 4-plex instead of purchasing a personal home and you can become filthy rich in a short time. Buy your personal home, dump tens of thousands of dollars into taxes, insurance, furnishing the home, maintenance and your investing career will be much tougher.

Not everyone can be like my wife and I, but I love the way we live because we are both the most non-materialistic couple you will never meet in your lifetime. We have enough money to live very comfortably next to the richest movie stars, but we really enjoy living the most simple and non-materialistic life a person can live.

We live in a commercial building at out plumbing company with concrete floors, raised two children in this building  who now go to college and we own zero furniture. No couches, no soft chairs, no clothes closets and no brand new cars with the exception that I did buy my wife an $80,000 Mercedes SUV about 7 years ago for a present and today the car has less than 2,000 miles on it because she doesn't want to feel like she is showing-off to her friends and our tenants. So, she drives a 2003 Chevy cargo van every day and she loves the van because she put blankets and dog beds inside for her mutts who go to work with her every day.

Again! We are not cheap and I tell my wife to enjoy spending money on herself, but when we go places she will buy Guess clothing and some $2,000+ purses once in a while, but she also gets up at 5 am 7 days a week and works 6 days a week until after 10 pm almost every evening. Not because she has to. She works because she loves what she does.

So, when you purchase 4+ units the property can increase in value almost exponentially when you increase the rents. This cannot happen with single family and duplexes.

BP has a similar calculator. Get rich first and then buy a personal home if you have to. BP has a great video with the waitress from Detroit who earned less than $20,000 per year. She was single, raising 1 or 2 children and she purchased something like 10 homes within 1 or 2 years and probably had net assets of more than $500,000. That video brought tears to my eyes.

Then, the video mentions something like people who earn $150k, or $300k (can't remember) tell everyone they don't earn enough money to purchase a property.

Then, there is the story I told 100 times on BP about the 20-year old Japanese girl who ran away from her parents in Japan, arrived in this country with zero money, never got a job, never had a driver license, never had a boyfriend and in 7 years she owned (financed) 18 condos and single family homes in upper middle-class neighborhoods and she called me on the phone and told me she had purchased a $550k house in Las Vegas and another house in Victorville California making her total 20 houses.

It was strange when I met the Japanese girl in 2001 because I had just purchased my first apartment building that was 28 units and she saw me working on the apartments every day and she wanted to hustle me for free work and rides all over the city. She was 27-years old at the time and I was 49 and had just met the Filipina girl I married about two years later. So, since I was so impressed with her ability to purchase 18 homes with no driver license and no job I wanted to rub shoulders with her a little and I did do a few favors for her. She was successful because she purchased homes and condos near colleges and put 2 to 3 students in every room including the bedrooms, living rooms, laundry rooms and even in closets. She actually had a Japanese male living in her bedroom closet. It may sound crazy, but I will bet she is worth more than $10 million today if the COVID didn't kill her business.

Check out the numbers for a 4-unit.

Dorian Redden · Answer

@Ronald Allen Barney Great advice!Definitely something I'm going to look into. Thank you!

Can I start investing with no money

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