I am trying to get started in realestate investing. I have attended the Whitney seminar and others, I do not have a lot of money and I am currenty working part-time due to being laid off. I just need to know what to do to get my first deal. I do not have a lot of money but I have heard so many success stories. I live in Texas and not sure what I need to do to get started. Thanks in advance for the help
The more money you have to spend on marketing, the more chances you will have to find deals but that does not mean you cannot find them without money.
Start by advertising on Craigslist and similar free sites. If you can afford bandit signs, then put them up but watch for your local laws. You drive to neighborhoods and put up flyers on doors, or knock on doors…etc.
What you need to know:
What is your exit strategy? since you have no money, I would assume birddogging and/or wholesaling
If wholesaling, how to do the paperwork
How to identify houses with possible equity, or finding motivated sellers with equity
Negotiation skills and being able to sell the seller on your price
Finding investors to wholesale or birddog to and what are they looking for
every investor is overwhelmed by people who call their numbers - including possible straight leads, realtors, “birddogs” and other “investors”.
if you don’t have any money, then wholesaling will be your investment of choice. see if you can get something good under contract. the problem is you’ll need to drive around and farm alot. you’ll need to follow up on run down and abandoned houses. you’ll need a nice realtor who knows investing and will help you get addresses and value estimates of properties in the area.
have you considered getting your license? learn the business, meet people, learn how to sell yourself that way, and increase your odds of earning while you’re learning. you still need money for this, but at least you’ll have the “insider” scoop on properties via your mls and public records system.
Investing in Texas is really not difficult due to the stable market and cheap house prices compared to other states.
The challenge new investors face is mainly lack of enough knowledge to close the sale and finding the properties. Once you are very knowledgable in the business, leads will fall in your lap all the time.
Here are some examples:
I got a call from a new investor who wanted to become a rehabber. She has been struggling to find deals. She has the capital (HALOC) to do the repairs and cover the holding costs, so my advice to her was as follow:
Find wholesalers by networking and calling the “we buy houses” ads and look for 3/2 houses over 1000 sqft under $120k in price that are light rehabs. Some may say these are hard to find, I get such leads from time to time you just need to network right.
Get hard money loan to cover the purchase price and draws for the repairs
Use the HALOC to make the monthly payments on the HML
Another example is to birddog the deals you can’t wholesale.
A fellow wholesaler I network with called me on a house that the owners could not sell. They had it listed at $122k, owed $108k on it. House was in perfect condition. I bought it on wrap for $108k with $20 down. I ran an ad in the paper and the first call was a buyer at $134k on owner financing. I got $5k down, $500/month profit, and $21k when they refinance.
I paid the birddog/wholesaler $500 when I bought it but since it turned out to be a great deal, I gave her another $500 when I sold it. Just because it is not a wholesale deal, you can still make money
I just got a submition on my website… Home is 2 year old I believe… Seller wants $115k, he owes $115k. House can be sold for $135k. I have a buyer who could put $10k down, so if I close on this house, I will turn around and make $10k down, and about $300/month cash flow till the buyer refinance.
The moral of the story?
You really need to get as educated as you can. There are more deals out there than you think but you won’t recognize them until you become better at the game. Marketing is very important, but without knowing how to negotiate the deal and what to do with it, marketing won’t work. Sadly though, knowledge comes with experience and some reading so be patient.
I have been doing free training and helping new investors as a form of networking and it works. They get knowledge, I get first dip on leads they don’t want, wholesales…etc. I couldnt do that though without building knowledge in my niche market.
thanks for the great info. i am starting with bird dogging/ wholesaling to build some cash and also gain some experience. it is guys like you that help us newbies get there without making the same mistakes everyone else has. speaking for probably many of us new guys, we appreciate all the advice we get.
I just wanted to add, that you do not need a ton of money (if any) to educate yourself and obtain the knowledge you need to get started. There is so much info. available FOR FREE on sites like this one and others. Read the archives, ask lots of questions, go to every rei meeting in your area that you can, take successful investors out to lunch. I learned WAY more from doing those things, than I did from any course I bought. Sure, it might take a little longer, and you have to sift through a ton of information, but if you are really wanting to learn, all of the info is readily available to you.
Also, there are many free and cheap ways to market, so don’t think you need to have a gazillion dollars for a marketing budget. It is not necessary. Helpful, yes, but not mandatory. Craigslist if FREE. I put ads on Craigslist every single day, and almost always get at least one lead. There are many other ways to advertise that require very little money. Yes, they might be more of a pain in the a$$ (like door-knocking, or passing out fliers, or cold-calling, or networking), but there are options. It all comes down to how much you want it. If you want it badly enough, you will find a way. Ask me how I know.