I have been doing a lot of research on flipping/wholesaling (seems like the more I get into it the more questions I have ;D) and want to dive in, but have no experience whatsoever in the real estate world.
I am basically in the same situation as someone else who posted a few days ago, no money, in between jobs, and terrible credit.
I have a friend that is a Realtor. He is going to try and help me out, but he lives on the opposite end of the state as I do. One thing he said to me, though kinda scared me. He said he knows several investors in his area and that they are extremely aggressive and that if I didn’t have any money in that part of the state I would get eaten alive(don’t get me wrong, he is still going to try and help me out as much as he can). He lives in a podunk area, whereas I live in the metro Atlanta area. I would like to find a mentor to tag along with and learn the ropes, but I don’t want “to get eaten alive” without money. Will not having money be a problem?
Its allways nice to have money! You still need a day job. Find a job of any kind to keep your self afloat! The school of hard knocks is long and hard! You need to eat while you learn the roaps! This takes time and patients to learn. Don`t be in such a rush that you just give up!
Not every one is going to make a million in the real estate business! About 90% of the want-to-bees turn out to be duds. If you cant spend the time and effort to learn, dont start. You will just waste your time and others!!!
Spend all the time you can with the people who know. Perhaps some of their knowledge will rub off.
Time is something I have a lot of Looking for a job to keep me afloat, but I was just wondering if it was possible at all to get into REI now without money since the market seems to be flooded with investors.
There are allways going to be (SO CALLED INVESTORS) ie;
rehabers in the business. It takes time to weed out the NO-DOERS, and work with the ones who try hard! IN any business you will find a school of (SHARKS) the real-estate business is no different!! You can read untill your head hurts and still comprehind nothing. Yet you can listen and see what you need to prefect your own style of endeavors.
Only you can learn,you just need someone to teach you!
My suggestion would be to learn what a good deal is from a rehabber’s perspective. Find deals that can be had at such low prices (65% or less of After Rehab Value (ARV)). These deals will not be found very often by using a agent and MLS as most of those are owned by banks and they don’t seem to like it when offers come in with no money out of the buyer’s pocket and the buyer’s name being, “YOUR NAME or Assigns”, which will be how you will want to buy property.
Reason being youa re going to assign the contract to a rehabber. Best bet is to find motivated sellers. Look in other forums on here on how to do that. Flipping properties by assigning them is what you want to do to have no money out of your pocket and not caring about your credit.
Good Luck!
Oh yeah and keep looking for that J O B as finding motivated sellers is hard work and may make ya hungery and last I checked most fast food places take credit cards, but don’t offer credit!
I would definitely find a JOB. Also I want to encourage you to keep working on the REI thing. Join the local REI club, tag along as stated before, read but experience is going to be your best education.
You can also find a deal (I started with low-income houses) place it under contract with zero money down. Have your out clauses, then advertise with some FSBO signs in major areas near the house.
Show the house, settle on a price making a profit, due an open title close and walk away with a check. Even if it is only $2000, it is still better than zero. Here is a link to a weekly schedule to get things started. These things cost the price of a phone call, newspaper, mailing… Choose what you can afford for the moment.
Here is another option for you. Since there are so many hungry investors why dont you take advantage of that situation. Find out how to contact some of them and tell them you are a property scout and wold they pay you a finders fee for properties that they buy. You can get from $1000-$2000 per property that they buy. That way you can learn what they like and dont like and learn from their experience without risk. Alos when you get ready if you dont own a home already you can buy your first dsicount house you find as an owner occupant. YTou can get an 80/20 loan =100% and wrap your closing costs into the loan. Thats a no money down method. Make sure your loan has no prepayment penalties so you can sell it whenever you like without penalty. Put your fix up costs on a credit card and pay it off as soon as you sell the house.=no cash deal
Datarox,
You said that he could get a 80/20 loan (as a means of getting a deal no money down) but wouldn’t that require him putting 20% down (or am I confused)?
<Datarox,
You said that he could get a 80/20 loan (as a means of getting a deal no money down) but wouldn’t that require him putting 20% down (or am I confused)?>
An 80/20 loan for an owner-occupant means the bank gives you an 80% first mortgage and a 20% second mortgat so it equals a 100% mortgage but there is no Mortgage Insurance Premium to pay.
There are also 100% loans without PMI as well. If on an investment property you max out the loan to value above 80% and you pay pmi. It doesn’t go away after you reach 80LTV it continues till you refi out of it. Also on 2nd home and investment refi’s you don’t get a 3 Day recession like on a conventional primary. Do your home work when using 100% financing and get all the facts. Also 80 20 programs usually have higher closing costs and the only way to get cash is to refi out of them no bank wants to be in third position.
Michael:
Don’t worry about getting eaten alive. If you can find some good deals, you can make some great money. Most successful wholesalers that I know do not compete against all the other investors on the same old foreclosure list. They are working the ‘absentee’ owner list and contacting homeowners directly via telemarketing. Or, they are driving for deals.
The first step for you to do is educate yourself to become a successful wholesaler. Steve Cook has a great course on this site. Education is the key.
Start attending your local REI meetings as well as looking in the paper for all those “We Buy Houses”
ads. Start building your 'wholesale buyers" list. Get out there and start driving for dollars! Write down all the vacant or boarded up houses in your area. Research their addresses thru the tax records, send them letters. Contact them direct using the tools now available on the internet. www.reversephonedirectory.com and www.merlindata.com is another good one.
Hi- question about boarded up house- i have found some & got a property profile showing owner address it shows the site & mailing as way to contact owner but it is boarded - should I check to see if deceased? prpoerty vacant long time thanks
If you’re just starting out, there is no better way than this! I started out reading like crazy and still was intimidated to just go out and write offers like all the books say. If you spend some time with ppl who are already DOING what you want to do, you can’t help but learn along the way. Absolute best way to go. BUT dont get too comfortable JUST doing that, after awhile, you will learn–THEN go take them risks (they wont seem as big!!)and apply that knowledge to your own deals.
Call EVERYBODY! make a list of everybody and what aspect of REI they specialize in. When I did this starting out, I made some great contacts that I still use today. There is no reason to make the same mistake somebody else made in the past-everybody is not the helping kind, but most will help out. You are looking for the kind of people in your city who are like the people on this site!