The Truth About... Getting Started With No Money Or Bad Credit...

Getting Started With No Money Or Bad Credit

There are some challenges when it comes to getting started if you don't have any money. For real estate in general, you do need some money, and starting capital, depending on your strategy, sometimes you need more than less - like wholesalers, you can find properties and assign contracts to investors. But… it comes down to time versus money - meaning if you don't have a lot of money, then you have to take a lot of time. The opposite is true as well - if you got a lot of money, you may not have to spend a lot of time. Just partner for your weaknesses. On the apartments that I mentioned earlier, my coaching student will own 32% of a 96-unit apartment with no money in the deal!

You can buy thousands of postcards and mail them out to people, you don't have to go around just knocking on doors, or go riding around for vacant houses and trying to find those. You can spend money on marketing, you can hire somebody to run Facebook ads, and you can run Google Pay Per Click ads. You can hire a virtual assistant that can send text messaging out for you or do cold calling for you. So you have a lot of options when you have money.

But if you don't - you still can become successful. If you don't have a lot of money, just leverage your time and money smartly! Find vacant houses, go to the courthouse and pull free data with different distress lists that you can use to send one-off postcard letters to or you can call. Get a list, get the phone number, and make contacts.

Using Other People’s Money To Invest

It's all up to you on how you want to go about approaching debt, based on the resources that you have. I always say you have to be able to look at both sides of the coin. The glass is always half full and not half empty. It's all about perspective. Let’s say starting capital - that's not necessarily a challenge that you should get caught up in, only to let that stop you at the end of the day. There are ways to go - you can raise private money, you can partner with other people with money, or you can raise promissory notes. I partner with my coaching students on deals. I raise private money from family, friends, and other like-minded investors looking to invest passively. They choose to invest in my company after they see the deals and returns that we do and how we operate.

Time Is Critical

You're not gonna get any more time back. You have to take action now because you're not getting any younger. Next thing you know 5-10 years ago, you’ll be like, “Oh, I should have bought some real estate. I should have got started”. I should have started investing in myself. I should have chased my dream to do what I wanted to do… because time is not going away for any of us. And I always go back to Steve Jobs, he died one of the richest men in the world. He had monetary wealth, but he didn't have any more time. So that's the thing that we don't know, how much time we have left? Life is short, you just see a lot of people come to a tragic end, and they weren't expecting it and die with all their dreams never becoming real!

Becoming Your Own Boss

So you got to take advantage of the time that you have today, to prepare yourself. You should be working on your business or your side hustle or your dreams or whatever it is at least one or two hours a day. If you're going to work for somebody else, for eight hours, you at least spend one or two hours of the day focused on what it is that you want to build in what your dream is. Because the thing is, as they suppose we're born into a potential recession, that there you're gonna see a lot of employers start cutting jobs, because they're not gonna be making as much profit, and the first person they won't be led, the first thing they're gonna be looking to shave and cut loose is people because that's one of the most expensive costs on the books. You don't want to be in a position where you give the employer the opportunity to affect your livelihood - where all your income is coming from one source, that's not a good place to be. So that's what I love about real estate they've allowed you to get back your time. It gives you additional income to prevent that from happening when you're in a situation where you are being fired or laid off.

Location = $$$

Some markets out here are more expensive than others, Austin, LA, New York, Boston, Seattle, and San Francisco, are some of the hot markets that are super expensive right now. If you live in those markets, and you're getting started, you may not be able to, come up with a down payment, the average household is $600,000- $700,000. That's why I focused on the Southeast. We did our first flip in Alexandria, Virginia, we paid like $220,000 to purchase that foreclosure from Bank of America. We went through and learned a lot. Completing that project. It had a $75,000 renovation budget. After that, we did our next flip in Birmingham, Alabama. We drove down 10 hours, got lots of estimates for different parts of the renovation project, and put the team together. We got a property under contract for $55,000. So 25% of the purchase price of our first deal there. We bought another house for $85,000, put $40,000 in it - and were able to sell it for $160,000.

So that's the thing, location matters because the cost of real estate is different and the cost of labor is gonna be different. Thus, returns will be different. It is just based on the different areas and conditions of the property to invest in. But now with technology, that challenge you can get past. You can build a team, you can travel out and meet people, and have boots on the ground. I operate in my primary markets of Panama City, Florida, and in Alabama over 14 hours away, depending on where you're at in Alabama. We have projects going in Mobile, Birmingham, and Montgomery. So you can definitely do it too!

You Don’t Have To Be An Expert

My last point is you must be able to build a team and get good at being a leader - to understand and to get knowledge on how to lead your team. I have an Acquisition Manager, boots on the ground, somebody that's underwriting, finding deals, working with the sellers, and brokers. You have somebody that could just work with investor relations, a team that's raising money and engaging with current investors. If you're buying properties needing renovations, then you must have great contractors that can do the work, can execute the business plan, as well as property managers to manage your rentals and orchestrate all this.

You don't have to be the expert, You don't have to know everything about how to be a property manager and how to swing a hammer, install floors, and paint. But you need to know a little bit about how to price it out, how to work with contractors, and how to motivate and incentivize people in order to help you become successful and help your team become successful.

So those are some of the challenges, but I gave you guys some of the hacks on how to persevere and circumvent those challenges and turn them into opportunities, which I'm a true believer in! 

There are always opportunities with every challenge.