I just turned 19 and started college, but i don’t want to wait to get through college to start making decent money. I have been interested in REI for some time now. I was just wondering if anyone had any suggestions on where to start especially if i have little money to start with. Thanks, I live in Ohio.
Just as an aside, why do people in Ohio worship the horse chestnut?
My wife is one of you!
Keith
You’ll receive a variety of opinions, and I’ll begin with mine. I believe there is no better starting point for a new real estate investor than through lease options. Done correctly, there are almost 100% risk free, and require little in the way of needed capital to get started. Keep in mind I am not saying this is the only way to invest. But, it is the best way to get started and a valuable tool to understand and utilize as deals present themselves.
Good luck!
If your anything like I was in college you want immediate cash which can be made in multiple ways but I would recommend wholesaling properties, I wish that I had learned how to wholesale because I could have spent my summers on the beach instead of slaving away building houses. Find some buyers first, find some houses, then connect the buyers to the houses. You can use the same disciption above with lease optioning as well.
Eric Medemar
Keith this should answer your Buckeye question;
http://www.myteamprints.com/college/osu/8004Brutus.htm
That’s right BABY!
GO BUCKS!!!
I’m with eric on this one. Wholesale is the best place to start with no money. It is like pulling cash out of thin air!
Brandon
I agree that wholesaling is a great way to create cashflow, but based on my experience it is “sometimes” not the best place to get started.
Some people have a diffcult time putting a house under contract and handing all the paperwork to wholesale to another party, even if it’s just an assignment… mostly due to lack of knowledge and confidence.
If you start as a BirdDog (or Property Locator) you learn a very valuable skill of locating potential investment properties, no money, no risk… once you find a property present it to an investor, if you work with a qualified investor on the first few, they are usually amenable to walking you through paperwork helping you learn and grow to the next level, wholesaling.
But if your confident and knowledgable from the get go, then by all means wholesale!
Either way… good luck!
Thanks for all the help everyone, I too was thinking that maybe I should start out as a bird dog since I really don’t understand all there is to the paper work, contracts, laws, etc. Does anyone know how I could find someone to bird dog for that would be willing to show me how things work?
If you want to birddog, you can find investors to birddog for by calling all the I Buy ads in the paper and all the bandit signs you see around town. Also, attend your local real estate club (you can find it on this site) and you will find more investors than you know what to do with.
However, if paperwork is what is keeping you from being a wholesaler, you really only have to understand two pieces of paperwork: the assignment form and the purchase contract. I use my local board of realtor contract. You can get one of those at a title company. They will even tell you how to fill it out. They may even be able to help you write an assignment contract. If not, I think Bill Bronchick offers one on his site for free.
The paperwork flow is easy. You use a Purchase Contract to buy the property. In that purchase contract, you want to make sure you include your subject to clause. (Subject bids and inspections). Also, when you fill your name out as the buyer, make sure you put “and/or assigns” after your name.
If you decide to double close (when you are making a lot of money and you don’t want your buyer to know how much you are making) remember that you are now the seller and your investor is the buyer. You have a new subject to on this one as well. Property is sold as is, how is, where is.
Hope that helps!
Brandon Lambert
There is a shift in the lending industry to uncover bird dogging and not fund deals which involve a payout to an unlicensed party acting as a “locator”. Not to mention the pittance you can make flipping properties doesn’t even compare with the fortune you can build and keep by buying right and holding. Buy five, refinance three and payoff two. Then do it again. You’re 19? By the time you are 40 you can be wealthy beyond your wildest dreams.
I wanted to know how it would work to get help from realtors in locating property to wholesale? I want to know a typical scenario in how the realtor would get paid? I would get the Assignment fee upon assigning the contract to a rehabber, but curious to know how the realtor would get paid?
Please assist.
This may be a dumb question but how would i buy 5 properties and refinance to pay off 2 if i have no money to start with. Can you explain how this process would work over time and what it would take to start? Also people say to start with lease options, again how would i do this with no money. If i understand this correct i would have to pay the lease payment correct?
I’m in the same boat as Buckeye I wanted to clarify exactly what it is a Bird Doger would do. Do you just find motivated sellers and report it to the investor tghen move on; therefore you do no actual rehab yourself?
Exactly. You do NO rehab. You pull money out of thin air. I love wholesaling!!!
Two questions…
As a bird-dog, I find investors, then find properties, for a fee. What keeps the investors from eliminating the middle man, or middle woman, and skipping my referral fee?
As a realtor, would I have a better chance at getting paid?
With wholesaling- I put the house under contract with a clause and “sell” the contract to an investor? Or does this process always go to closing whereas I buy the house then sell it the same day?
Nikki,
You keep them from going around you because there will be several investors looking at the property. Nobody can afford possibly losing a deal because they got greedy and didn’t want to pay the assignment fee. Also, you never even mention that you are assigning the property until they agree to a price. Example: I contract to buy a house for 19K. I get an investor to buy said house for 22K. They agree on price, so I show them the purchase contract and get them to sign an assignment agreement for 3K. Both the purchace contract (which you should have already faxed to the title company upon signing it with your motivated seller) and the assignment contract go to the title company. The title company will do all the necessary paperwork. Your investor will bring 22K (plus his/her share of closing costs) to the title company. 19K will go to the motivated seller and 3K will go to you. The title company will write both of those checks out of escrow. The investor/buyer will have a hud statement reflecting both the purchace price of the house and your assignment fee. There seems to be a lot of concern regarding getting cut out of the deal on this board. If somebody got really dastardly and tried to go right to the seller while your contract was still good, you have one final recourse. You could file your original contract as a mechanics lien against the property. Is it a good lien? No, but it will cloud the title anyway. In order to get the lien removed, the seller would have to sue you, which would cost more than your assignment fee. When you get the cussing call from the seller, you tell them that you would be more than happy to release your lien that you placed on the property because they violated their legally binding contract with you for the tidy sum of 3K. Again, you get paid. Only do that last tactic as a last resort. If you file the lien before there is a problem, you will make it a problem to close for your buyer and seller.
I will stop rambling now.
Brandon
Brandon, you have a lot of info. thank you. I’m fitting everything I’ve learned in pieces. I really want to get out there and get hands on.
Now, where do I get a purchase contract and assignment agreement forms? Are they scary??!! I think I need a mentor.
Also, would it help to get my realtor’s license if I primarily wholesaled or would that force me to involve brokers and their fees?
If you lived in Texas, I would say go and download it from the trec website. I don’t know where you live, so I would recommend you go to your title company. They should have board of realtor contracts there. They will even show you how to fill it out. Also, if you go to the righ title company, they can give you an assignment contract. Both are very easy to fill out. What you need to do, though, is find the right title company. Go to your local real estate club and ask other investors where they close. The key is that you want to find a title company that 1. works with investors and 2. will do assignments and double closes.
As to your mentor question, again, if you network good enough at your real estate club, you should find a great one there for free. I mentor people all the time, because I know they will bring me deals.
Hope that helps!
Brandon
Oh yeah, as to your realtor license question, I know some realtors who are investors. They have it worked out with their broker that they don’t have to pay them on properties they buy for their own investments. I choose not to be a realtor, because as a realtor, I would have to disclose more stuff.