Eager to start my Investing journey but am $20,000 in debt.

[Nicholas Smith]

Hello Bigger Pockets! I am a new investor that is still in the educational stage currently and am very excited to start doing deals in my market (London, Canada). I Have been soaking up as much information & knowledge as I possibly can from reading books as well as listening to the Bigger Pockets Podcast every day. I want to get out there and start networking with local investors in my area and hopefully find a mentor that I can offer value to in some way. My concern is that I currently live paycheque to paycheque and can barely pay my bills every month with the amount of income I have coming in currently, therefor I feel like there’s no point in approaching any professionals in my area as I don’t have any money to my name. So I guess I have 2 main questions here. 1: Do I pay all of my debt off before getting out there and engaging in the market/community? 2: What could I do in terms of Real Estate that doesn’t require anything out of pocket?

My main concern is not being taken seriously by other investors in the area due to my financial situation. Was anybody else in a similar situation or still is that could give me some guidance? Currently I’m attacking my debt head on with everything that I’ve got, taking on a 2nd job as well to get back to par so I can begin saving my down payment for my first property! Please leave a reply with any insight or suggestions you may have!

Thanks for your time,

Nick Smith

[Connor Anderson]

Hi Nicholas - I was in a very similar situation as you but over a year or so worked my way out of it and got my first property. I was also afraid that I would not be taken seriously since I had no money and no experience. So I changed that.

First thing is first, you need get out of living pay check to pay check (yes we spell that a little differently in the US haha). In order to do that I would suggest bingeing the BiggerPockets Money podcast rather than the BiggerPockets podcast for the next few months. That will teach you how to save first and cut expenses so you are no longer struggling to make ends meet. 

I would work to pay off all debt that is over 7% interest rate. So likely credit card debt, maybe a car loan with a bad interest rate. Student loan debt is not something that you need to pay off in order to buy a property unless the rate is really high.

Once you become financially sound and can walk up to an investor and say "Hi I am Nick, I just paid off X amount of debt, I am saving X dollars a month towards my first rental property, and hope to buy one in X months. I would love to learn about your investments and how I can I potentially help your business grow." then I think it is smart to actively engage in the community. It shows that you have already put in some work, and you have done more than the average person to prepare yourself to invest.

There are a number of strategies that you can use to invest in real estate with little to no money down such as wholesaling, buying homes with owner financing, or acting as a property manger. However there are 0 strategies for investing in real estate with little to no money that involve little to no TIME!  So recognize that. If you don't have money you better be prepared to but in the TIME!

Hopefully this is helpful but do not hesitate to reach out!