Hello REICLUB community,
This is for the veteran’s, if you had to begin investing all over again and you had nothing (No money, no credit or bad credit). What Strategy would you use to get where you are now in your current state of success?
Hi,
Wholesaling
GR
Making signs from scratch, posting them on a few H-wire stakes and screen some leads. It still works for vets, just all about scaling up.
I would still do Wholesaling. If you have no money, no credit and no experience…this is the Real Estate business that you can surely do. You just have to work hard and learn as much as you can.
Wholesaling… Not easy but for sure doable without money, credit etc…
The other method is to buy on land contract. Because mortgage rates are so low, this is not always the cheaper option but it keeps you from going to get a bank loan. In a land contract, the owner plays the role of the bank but he will charge you a rate higher than the bank, especially if your credit is poor. You put a little money down (or even no money), then you make monthly payments to the property owner for generally a period of 3 to 5 years. At the end of the payment period, you have to pay the remaining amount in one lump sum. That is when you get a loan. By then, you have equity and hopefully a higher credit rating. Meanwhile, you rent out the property for at least what you are paying.
If I had no money and bad credit I have something seriously wrong in my financial life that will eventually take me down no matter what strategy of real estate I follow. Most people think that when they don’t have money what they need is more money. That is not the case. It doesn’t matter how much money you make if you are not organized about your money you will end up with no money eventually. 70% of all professional athletes are bankrupt or in serious financial trouble within 3 years of leaving their respective leagues and they make a LOT of money. I am not just talking about the $500k/year third string offensive guard, I mean even the $25million quarterbacks. It is not about the money it is about your financial behavior. Think about it, what do you have to pay each month? You have 1 rent payment, 2 car payments, 1 electricity bill, 1 gas bill, 1 water bill, 1 cable bill and I don’t know if you are behind maybe 5 credit card bills. You get the same check on the 15th and the 30th of each month like clockwork to pay this with. That means that you are not organized enough to pay a dozen or so personal bills on time with a consistent cashflow. How are you going to all the sudden be able to figure out how to take in 10 rent checks, make sure you have them all in and they all clear their respective banks and then get all of their mortgages any insurance and homeowner’s associations, taxes and whatever else for them all paid on time every month?
I always say that the worse time to start a business, and real estate is a business, is when you need the money from that business. If you don’t get your financial house in order you will come to a point that you will have money from your real estate dealings and you will need to decide if you want to use that money to pay to fix a leaking p-trap in a rent house with a fat lazy tenant that stinks or buy your sweet, smart, hungry little girl a hamburger. You need to be able to handle your personnel life financially so you don’t cannibalize your business.
Credit starts with paying all your bills so that none of them are 30 days or over late. If you put all your bills on autopay for the minimum, you never miss a payment and no payments are ever 30 days late. If you do just that you will not have bad credit. With good credit you don’t really need much money.
That’s really sound advice.
The thing I see is that there are different reasons for bad credit.
I take this into consideration when I offer financing to a buyer with credit issues. I want to know what the source of the bad credit is.
If it’s a chronic failure to handle finances (pay bills on time), that’s one thing.
If it’s job loss, hospitalization, divorce, or death, those are other issues.
I don’t like the “can’t handle bills” sort of credit problem. That never seems to solve itself.
Speaking of businesses, I believe the number one reason that businesses fail, is failing to treat them like businesses. Of course this starts with handling money wisely.
Great post.
Definitely wholesaling. This is technique that is used world wide. There is pretty much no risk at all and you dont need any cash or credit. This is by far the quickest way to build your capital! :smile