A REAL newbie

Hello everyone. Right now, I live in long island new york and in about a month I will be moving to charlotte, north carolina. I am 34 years old. I would like to get into the glorious world of real estate investing. I have zero experience. I dont own a house(the average house on long island is $500k) and I have never purchased real estate. I can honestly say that I am totally new. I have read e-books, regular books, spent alot of time in this sight reading articles for beginners. When I get to north carolina, I plan on joining the reia there(i didnt even know they existed until a couple of weeks ago when I started my research.)
Here is my situation. I really dont have money (i will have a good job though when i go down) or good credit. I have no experience doing a transaction. Can someone like me make money without the credit or money? I just need some really good advice. I dont mind hard work and im willing to sacrifice to make great money, I just dont know where or how to begin. I read some newbies on here doing their first transaction, but i wouldnt even know where to begin to do a first transaction. I would really appreciate some good, sound advice from you experienced people (or even newbies who have done a deal or 2) Thanks everyone.


The truth is that it does take either money or good credit (preferrably both) to make money in real estate. ALL businesses require money and/or credit to succeed - and real estate investing is a BUSINESS.

However, you seem to be ahead of many newbies in that you have a general plan. Joining the REIA in North Carolina is an excellent idea. Having a good job in North Carolina will be a big help.

Since you need money to get started, I’d suggest trying to find a successful investor to work for. You could work your regular job and then work for the investor on the side. This way, you’ll accumulate some money; you can pay your bills and improve your credit; and you’ll learn about the real estate business.

Do this for until you’ve improved your credit and have a few thousand dollars in the bank. Then, when you start investing on your own, you’ll have a much better chance of succeeding.

OR you could click on the banner ad at the top of the website. Working only 10 hours per week to make $250,000 dollars a year sounds pretty good to me! Ridiculous, but good!


LOL mike,

I see those signs all over the place, make $5000 a week working only 5 hours.
Anyway, i really appreciate your advice. I am hoping when I go down there and join the club, a seasoned investor would maybe take me under his wing and if he supplies the money i would do the leg work (while he is teaching me) and do a 50/50 split. What about the hard money lenders? Would they put up the money(I know they go where traditional lenders dare not tread). I have read some evil things about them and also some good things.

Thanks again.

I dunno about a 50/50 split… from what I hear, most bird-dogs just locate the deals and take them to the investor for a small finder’s fee, like maybe 10%.

You said-

What do you mean, “or good credit”? Sounds like if you don’t get that good job you will destroy your credit just for the heck of it ::slight_smile:

Seriously though, ALWAYS have excellent credit. Because of our excellent credit we were able to invest. We didn’t have a lot of money when we started out either. you can read full details in my blog below but we started collecting credit cards with 0% interest for 6months to a year. That is what we used for down payments. We paid those off as fast as we could with our cash flows and if we had to did balance transfers to other cards with 0% when these were about to expire. Because of our excellent credit and being offered 0% creit cards, we now have a few million in equity in 9-10 years. Not too bad profits for using other peoples money.

If you want to invest, be creative!

I realize how important good credit is. Unfortunately, i had some things on my credit that only time (about 2 years) will take care of since everything comes off your credit in 7 years. It would be nice to be able to get a handfull of credit cards, but its just not an option. I dont want to be a bird dog as I feel that if I am putting forth all of my free time and energy into finding a home and crunching the numbers and making sure its a good deal and driving to the properties and talking to the owners, and then to give it to someone else for $500 fee or so. To me thats not worth it. Maybe Im wrong, i dont know, but it just seems like a lot of work for almost no money.

Instead of birddogging for a finder’s fee, look at making offers as assigned. That can make you a couple of thousand instead of a couple hundred.

That sounds interesting, but i dont know what you mean by that, would you elaborate a little more? I would appreciate it.
Thanks bluemoon

This is when you actually take control of the property. Not just find it for someone for a fee. You make the offer at some percentage below market price and on the offer sheet you make the offer in your name Adamr or as assigned. That way you are actually in control so that you can assign the property at closing to the actual buyer (the guy with the cash) and pocket the difference. The money man will want a good deal on the property and there needs to be enough there for your pocket also.

Is this what they call wholesalling? Do I go in with an investor or do I find the property, do the deal, then find an investor?

Look,the honest truth in REI is that you do not need alot of money,nor credit to do real estate when you first start.

I have to disagree with PROPERTYMANAGER.

Now,you do need ,however,marketing funds,advertising funds,and some money for earnest money.All in all you could make a few hundred to a few ,or alot of thousands with about $300-400 invested.No credit check,no application,no qualifying,no income check,Just your expertise and knowledge is needed.So all the money you will need is about $300-400 bucks,and also the knowledge and expertise.Then your good to go.

Learn about wholesaling and assigning first before anything else.That way you take care of cashflow needs.


Hi Propertyvestors,

thanks for the advice. While I could swing hundreds, I could not swing thousands at this point (not yet anyway!) I have been reading and spending hours everyday reading and trying to learn about rei, and the general consensus is that you dont really need money (atleast for the property itself) to do deals. I am willing to work my butt off to find these properties, but I would love to have a seasoned investor hold my hand on my first deal. Do you think if I join my local reic when I get to north carolina that someone in the club would do this? IS this something that is typical? As I have never done one before, Im sure I would be lost. What about hard money loans? As someone with not so great credit (my credit score is about 520), I know they give loans to people like me in for the short term with the intention of flipping. What are your thoughts on that?
Thanks again

Go to your REIA and network.Maybe someone will be willing to take you on.but not a guarantee.

i reccomend you get a good course on wholesaling and learn it and study it.YOu need a guide to know some of the details.You cant just wing it.I mean you can but its going to be harder and longer.Go ahead and save some time and get a good course on it.
But if wholesaling is not your taste,read up more on some of the techniques on REI and find out what you want to do.I just dont reccomend you get involved just yet in rental property.However,its all up to you.

If you like I have a good course on wholesaling by Scott Rister.I will sell it to you for a small amount if interested.


I guess in the beginning what I want to do is buy either forclosures or fixeruppers or both and sell the. I dont want to start with rentals or anything complicated until I get some real world exp. I will be going to the library today to get alot of books. I want to thank you for your advice. Any thoughts on hard money lenders?

Hi Adamr,

After all what was said before, and were said very right things, i think nobody told you the easiest way to start investing! Since you are moving to a new place, you will need a new home. Why not transform your next home in your first RE investment?
Since you ll have a steady income, why not put a nice house that you like to live, under lease-option contract? You would begin right now developing your equity, and after some time you could buy it ( exercising your option) or you could sell the option for a profit.
Good luck,

Well, I actually have a good deal. When I move, I will be staying at my cousins for at least a few months until I get settled. They proposed I stay there for a year or more until i save enough to buy instead of renting. I am fortunate to have such good relatives. I think I have to do more research on lease-option contracts since I dont know much about it. From what I understand, North Carolina is an incredible place to do rei since prices at this time is still very cheap (you could buy a 3 year old 2200sf home for less than $160!) How do I do a lease option with little or no money? I like your idea veroclev. 1. I have a property, while im renting, to have the oportunity to own
2. Im paying towards it so I am building equity
3. I could excercise it any time in the near future.
But dont need a down payment? or Good credit to get a loan? to eventually buy? Where do I even find a house with that kind of option? What owner would agree to it?How do I go about selling the option? Who do I sell it to? I thank you for your opinion

Hi again,

I m glad you liked my idea.
But you see, the work will be yours, and you ll need a lot of reseach first. To do that you ll need a lot of time, of course…
About this investment strategy, it seemed to me the only one to start right now and fits to your weak actual position: lack of imediate credit and lack of adequate amount of money.
If you thought you could build a REI career without those, you re wrong and REI is not for you.
So what i was proposing to you was to overtake your actual finantial handycap through diligent research and marketing an opportunity ( finding a socalled “motivated seller”, negotiating a favourable deal and jumping in): but nobody said it would be easy, you ll have to pay the price of getting started without both cash and credit.
Of course you ll need some money, not to the down payment since you ll not buying anything, but instead for an option fee ( 3-5% of the value of the property : without that? NO DEAL, sorry but Santa Claus appears only in December?!).

Good luck again,

Thanks Paulo,

I guess what I wanted to do was to start off maybe having someone (perhaps a seasoned investor from my local reic when I move or a hard money lender) put up the money on my first couple of deals, while I do just about all the work (maybe with guidance from the investor) and split it 50/50 with him/her. buy a cheap fix/up, then flip it and build some equity that way. I figure in 2 years my credit will be restored. (I have most negative things coming off in 2007). And my job will have some time behind it. (remember I am moving in a month to north carolina) What about a hard money lender? What are your thoughts on them? From what I read, creditwise, i could qualify for their loans (since I read you need at least 500 fico)

Thanks for all your help

Hello, I know you are thinking about going with a Hard Money Lender. I will tell you that you will not be able to do so at this time. In the very first post, (propertymanager) you recieved the best information.
It take money available or good credit or both to actually do real estate. HML ask for cash available, equity in other properties or collateral to secure their loan. At this point, I feel that you do not have any of this things.

Another point that I would like to make is that even private money investors that loan money will want you to have cash available to do real estate. They ask for money upfront also.

A true investor knows it takes money to make money. If all you needed was the desire and motivation to do real estate, then everyone would be doing it.

Here is the best advice I can give you:

  1. Read everything you can about RE
  2. Read these posts and ask many questions.
  3. Definately join the REI club when you get there
  4. Save your money!! Fix your credit!!
  5. Always try to find funding from a traditional source first
  6. Use a HML as a last resort

Sorry, I didn’t mean to write a book but, I feel that you are not being lead down the right path to being successful in RE. I hope this helps.

You don’t need money or credit to start investing but having them sure accelerates the process and provides far more opportunities.

But seriously, getting your own ‘financial house’ in order should be a priority before you buy a real house.

You don’t have to wait for bad things to come off your credit report.
Reviewing the Fair Credit Reporting Act and reading up on credit repair will accellerate THAT process.

I brought my brother in law’s credit score up 60 points in 3 months.
And the stuff we couldn’t get off I negotiated settlements on at a fraction of the origianl debt. (usually 60%)

REI is more difficult starting out behind the 8 ball, but not impossible.