You sound so much like me. I am still learning. I bought every real estate book (almost) from the library because I couldnt afford the books sold by professionals on the infomercials at night. They know how to get you excited right? My credit is also not too good and I do not have thousands to put down for a home. I fell for all those no money down gimmicks but when I thought it was time for me to get my feet wet, I was hit hard. I had to put down money for my EMD and sometimes what I wanted to put down, the seller wanted more. For seasoned investors reading this, they may be thinking “ok so what, that’s nothing†but $1,000, $2,000, $3,000 and even $13, 200 (long story) is like the equivalent of a hundred grand when you are broke. Then I had to pay for inspections. They don’t tell you this in those books. But don’t disregard all the information you read. It’s a good backdrop to the business.
So I went back to the drawing boards. I have come across unprofessional real estate agents who don’t return their emails/calls then to failed deals because I couldn’t perform. (translated to: I didn’t know what I was doing). When you put in an offer for what you think a property is worth, you are condescended because its not what the seller wanted (even though its actually what they property is worth). All of these are learning tools. You need to ask yourself if RE is a business that you REALLY want to be in. I gave up on it about three times but then somehow I always came back to it because I really loved it. Setbacks can really do a job on you and turn you away. So I found a way to work around my incompetencies and lack of finances. Like most baby investors, I began to wholesale. I tried FSBO but I just found it easier to work with banks. Some investors will think I’m crazy because they find it easier to negotiate with an owner for the right price. I have problems with negotiation, yes I know I need to be assertive in RE but what can I do? Im learning. Where I live, there are tons of foreclosures below %65 of market value so that’s where I started.
Find a good deal. Ask investors here what they typically pay for, for a rehab. I have read around 65%-70%. Try to come up with at least $1,000 for your EMD and another $300 for an inspection of the home. Use the inspection report to get estimates of how much the rehab may cost. If you have to borrow from friends, sell some things, do it. The reward will be much greater and you can pay them back 10 fold. Wholesale your deal to start off through either an assignment or double close. Use your profits to better your credit and score and save the rest for your next deal. Before you know it, you will be at the stage where you can either solicit a Hard Money Lender or a Conventional Loan to do a rehab yourself. Do the same process over until you gain that confidence back. Don’t give up. I lost my confidence many times because of people telling me I cant do it or other roadblocks. You just take these and you learn.
