I just sent this letter to a guy who was just starting out and wanted some advice.......
Hello,
There is one thing I'll teach you that will make you filthy rich beyond your wildest dreams. It's the thing that all REI's who are wealthy to extremely weathly have in common. And it's the thing that beginners lack. Also what I'm about to teach you, you can't put a price tag on. It's way too valuable. But yet it can be gained quite rapidly, And that is simply experience.
See beginners don't do deals. They think about doing deals. And they hold out thinking that they'll wait for the best deal, or the right timing, or for their situation to "change first" and then they'll do a deal. And often they never get their feet off the ground.
Do whatever you have to get that first deal out of the way. It doesn't matter how much down you have to put, it doesn't matter what the property is, where it is, who's living in it, what you can do with it, and definitely the numbers on it don't matter all that much. Yes it should at least make a little profit once you sell but again, it's not the most important thing. The most important this is to just rush through getting that first deal under your belt.
Here's why...
The key is to not worry about the money you'll make. That's not important at all on yoru first deal. It has no baring on what you're trying to accomplish. Because if I gave you $10,000 or even $50,000 right now, how much better would your lifestyle actually be? No better. You couldn't retire from your job off that. Nor could you do anything significant with that. And that's what 1 flip of a house might give you. So think on a grand scale here. And realize that 1 house flip will not do a DAMN THING FOR YOU!!! So please do yourself a huge favor and completely dismiss the idea that the few grand in profits you'll make matter. They don't matter one bit. You can't retire, you can't put your kids through college, you can't do anything on that money. It's too little of an amount. So totally dismiss the idea that the profits are the important part of doing your first deal. They are not important at all in the grand scheme of things. What matter's more than anything is just the "experience" of doing the deal from start to finish.
I want you to think about it like this. The value of the experience of doing your first deal is worth $250,000 dollars, or 1m dollars. Because that experience will make you rich. Not the $25,000k profits of five figures from your first deal. Because once you've done one deal, you can do another, and another and another, to the point where you become an experienced REI. The experienced real estate investor is always doing deals. And multiple deals at the same time. And bigger and bigger deals. At once you're at that stage you'll be rich or extremely rich. You'll be a millionaire and have the ability to make millions upon millions more.
So just do a deal to get the experience from it. That's where the value is when you're just starting out. After you're first deal it only becomes easier from that point forward. Soon you'll be doing another five figure deal every other month. Then soon you'll mostly be looking at six figure deals. Within not too many years you'll be a millionaire. And once you've made a million or more then to make millions more becomes very easy. Because you have the cash to beat out small investors who can't compete with you, and you have the ability to look at big deals that will make you "millions" per deal. Not just a few thousand bucks.
And I guarantee you will get there if you can just get off the starting block and start to do more and more deals, over and over again. Trying to pull five figure profits out each time. Always leveraging that money into bigger deals each time. Then eventually looking for deals where you can make six figures. Even seven figures.
A simple strategy could be:
Start by flipping paper contracts until you can save enough to buy a house to flip
Start flipping houses for five figure profits and learn to do them rapidly one after another.
Then eventually you can look at bigger homes flipping them for six figure profits
At this point you could buy apartments to hold or buy them to condo convert
Eventually look at buying an apartment building. You can flip apartments for six figures pretty easily, or you can condo convert often for more than seven figure profits.
Once you get to the point where you're doing condo conversion you'll be making seven figures per conversion. The conversions take longer mind you than to flip a house. But you make a lot more money.
From there the skys the limit.
But you won't get to that point until you start flipping some paper contracts, and or houses to build up the invaluable experience necessary to know hot it all works. And that's also why it's critical that when your driving in your car that you be listening to people like Carlton Sheets audio program and others like that, so you turn your drive time into study time. Because you got to get this learning curve out of the way. Once you do getting rich is easy.
On a side note: Back in 2003 I was just starting out, and I had no clue how all this worked. I had only bought 1 condo before and I lived in it. But I knew one thing for sure, that if I could buy a rental property and get the experience out of it, and know how it's done, that that experience would make me rich. It's just like Carlton Sheets says "do whatever it takes to get that first deal" out of the way. You have to get it over and done with. Just for the experience. And I'm not saying that means buy something that you can't flip for profit because you bought it over priced. Of course follow the normal principles of flipping, buying at a discount and then selling at FMV ect... but get it done so that you can move on. There's no money to be made of one deal. $10, to $100k will not change yoru life all that much. You can't retire off that. And because you have to reinvest those profits back into your next deal anyway you really can't even spend those profits on yourself anyway. Spend 1k to take a trip to Las Vegas, that's your big reward for doing 1 flip. But the rest have to go back into your next filp. So just get that first deal done at any cost and as fast as possible. Enough said. Quite reading posts and start looking for deals and making offers.
Good luck.
