Pretty simple. You have all your knowledge today, but none of your cash, except for $1000 of it. Yes I know it’s been done before, and I’ve read through it, but I still think a refresh is in order.
What is your plan of action? Details matter!
Sounds like you are trying to find that easy magical solution. There is no such thing. If you were going to open a restaurant and you get on a restaurant type forum and ask that same question, what do you think the answer would be?
fadi
Hah. No such thing. But as for opening a restaurant, I’ve worked in restaurants for about 11 years now:D
I’m just curious as to first of all the routes, ie flipping vs rentals, etc. Just curious what’s most advisable at lower price levels, since not everyone can start with 100k and a strong 80-100k/yearly income.
Also, I find it interesting that Kiyosaki, the “smart” money-guy failed so horrifically, and I was curious as to how others would fare, or would in their own minds fare.
That’s easy…
I would start a direct mail campaign… There are five prospect groups you should concentrate on.
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NODs
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FSBO
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FRBO
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Expired Listings
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General Farm
On Mondays pick up to 10 NODs, Tuesdays up to 10 FSBOers, Wednesdays up to 10 FRBOers, and Thursdays up to 10 Expireds, Fridays at least 10 people in your farm area. Mail to these prospects a series of letters and Postcards…
Day 1 – Professional Letter
Day 3 – Mary Letter
Day 7 – Post card
This mail will cost you .55 cents for letters and .35 cents for postcards and if you do this cycle for a month you’ll have spent around 300.00.
During your mail campaign you should also cold call these prospect groups. You’ll have the numbers to the FSBOers and FRBOer. You expireds and the NODs are a little harder. As for your farm, just dial randomly. Most areas have the same prefix so dial 877-0001 then 877-0002 and so on.
Go to vistaprint and order “Free” cards that say that you buy houses… Pass 10 a day out to people you don’t know…
While waiting for your cards to get to you, you should create a list of everyone you know. Your list should include everyone you can call or e-mail. No matter what your relationship is to the person, if they will know you by name, then put them on your list of people you know. One note: only put people on your list who live in the city in which you plan to buy houses. Asking Grandma, who happens to live two states away, to refer you to her friends will not be the highest and best use of this marketing program. With that said, everyone else will be.
The following are examples of types of people who could be in your Sphere of Influence.
• mother and mother-in-law
• father and father-in-law
• brothers
• sisters
• former and current brothers-in-law
• former and current sisters-in-law
• past and present CPA
• past and present attorney
• past and present real estate agent
• landlord
• hair dresser
• manicurist
• massage therapist
• workout trainer
• tailor
• pool service rep
• gardener
• doctor
• all members of a charity organization you might belong to
• church members you know
• anyone you have donated money to—ever
• co-workers
• former co-workers
• former employers
• current employer
• current customers of your current job (be sure to first get approval from your supervisor)
• former customers
• drinking/social buddies
• college friends
• high school friends
You can see that the list can go on and on. I will caution you not to prejudge anyone that comes to mind as being someone who will not be receptive to your new endeavor. Everyone changes, and if four years ago you didn’t have the best of relationship with them, so what. Don’t let that stop you from including them.
Once you have established a list of people who know you, you do two things to the people on your list. One, you will mail them a letter with 10 business cards and secondly, you will telephone them and tell them about your new career.
Here is a sample of the type of letter you should send:
Hello,
I am excited to announce the establishment of my new business, [Your Business Name] here in [Your City]. After careful consideration and extensive study, I’ve found the one thing that I enjoy and can make a difference with – Real Estate Investing. The opportunity to help people who may need to sell their houses is a worthy endeavor and the rewards are endless.
I understand that jump-starting my career is of great importance and I am counting on you for your support.
One of the first rules of business is that referred customers are the key to success, as these people are much more likely to do business than those who don’t know anything about me. I put together a list of people who I felt I could count on to help me succeed, and I had no doubt that you would want to be included in this process. And, it doesn’t come without reward to you. Although I know that you would not want something in return for helping me, I’m excited to be able to offer you $500 for every referral whose house I buy. This is for your time in telling others about what I do.
So if you would, when you hear of someone who is looking to sell their house, just give them one of my business cards and at the same time, gather their telephone number and name, and then call me with that information. I am hoping that won’t be too much trouble. I would certainly appreciate it. To make this all the easier, I have already written your name on the back of each card.
My business will cater to people who need to sell for a number of reasons.
• Trying to buy a new house and need to sell
• Divorce
• Foreclosure
• Probate issues
• Job Transfers
• Tired of being a landlord
• Bankruptcy
• Any other reason someone may have
Thank you for your help, and I appreciate your friendship and support.
Respectfully,
[Your Name}
[Business Name]
[Telephone Number]
Now go to the mall or search online for polo shirts and buy at least 3. Have them silk screened with the fact that you buy houses. Then Wear them everywhere… I wear mine to church, in the boxing ring, to the gym, and more importantly to seller’s houses.
So at this point you have spent in the neighborhood of 400.00 for the privilege of prospecting.
Before you go out to the sellers house wash and clean your car… Occasionally when you get a contract signed the sellers will walk you out to your car and you do not want them to see a mess.
Since you don’t have any money left to speak of you’re going to need to learn how to buy creatively…
That means options or subject to. No matter what always get the contract signed before you determine if you want to buy it. You won’t have the experience to know the difference and failing to get a contract signed is one of the key mistakes investors make. You can always cancel it if you find something out during your due diligence.
I Would make the escrow period or option period as long as I could so that I could find the buyer before I take ownership. And extending escrow will be required if you cannot. You must have a concurrent close assuming you’re flipping.
Now last week I purchased a 3/1 1068 sq ft on a corner for 96k with 500 down subject to the existing loan and the house is worth 225k… So you’ll have just enough money…
Last little bit of advice… YOU MUST HAVE A CAN DO ATTITUDE… Anything short of that 1000.00 is not even close to enough…
Good Luck
Michael Quarles
1000$
I would do 2 things:
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Ride around looking for junker properties. Find the owners. Negotiate price with them, and flip it to another investor.
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I would get the Notice of default list, get phone numbers and cold call them, and knock on their door to buy their house.
I’m with Tien. I’d be a birddog for investors and use the $1k to pay for gas, business cards, letters to owners and option checks. If I want to take a more passive approach, I’d find a private lender and loan it to them so they can grow it at 12-14%. I wouldn’t take a passive approach, but it’s an option if you don’t want to do anything.
Wow MichaelQuarles, that’s intense! I was looking for detailed more than 1 sentence/1 word answers, but that will be an interesting plan to draw ideas from.
Would anyone try notes? How about something so different that my feeble mind could never dream it up? Just curious.
Emperor,
Here’s the big question. How is your credit? You can be successful in this business if you have either credit or cash, but the odds are TERRIBLE if you don’t have either one. If you are broke and have bad credit, then I would suggest getting a second or third job and work you butt off to pay your bills and build up a cash reserve. You might even consider selling whatever toys you have (boats, cars, motorcycles, etc) for extra cash. There are 168 hours in a week, which is more than enough time to work 2 full time jobs and still have over half of the week left over!
I would NOT blow your only $1,000 on marketing or any other nonsense. Build up your cash and your credit and then think about investing in real estate. Being successful in real estate requires some money and/or credit, and a LOT of hard work and persistence. Real estate is nothing like the TV Guru infomercials. In the real world, if it sounds too good to be true - it is!
If you only have $1,000, but have great credit, then there’s no problem. Learn the basics of the business, write a short business plan, and get started.
Good Luck,
Mike
Mike… Marketing is they key to all successful businesses… Dont down play it too much… And as for the credit. IT is not needed and shouldnt be used, it doesnt have to be when you learn how to buy subject to the existing liens… As for cash yes CASH is required if not to buy with then to run your investment business…
Rather then the second job investors need to learn where CASH comes from… Each of us have a money tree in our backyard if we just look hard enough. Once an Investor finds theirs they can stop working their first job and make this new career their vacation.
Michael Quarles
Oh wow. Only $1,000.
Well, first you need a place to live and you will freeze to death in my area if you try to live in a used tent under a bridge. That would be a good option in southern states (if you don’t get murdered for your shoes)
You can’t live in your car, because you can’t buy a car that runs for under $1000, so I guess that leaves sharing a room in a rental that is full of dopers and snow boarders. You can get half a room for about $300 a month (make sure you get kitchen priveledges).
To do real esatte, you need to communcate, so you need a cell phone. You can stall them off on payment for about 3 months before they cancel it, but I suggest you pay the bill, because it just doesn’t make sence to destroy your credit over a $120 cell phone bill.
You can use the computer at the library, but you need to get there. A used bicycle is about $25 at the thrift store.
You can’t go around naked, so back to the thrift store for every day rags and one good suit to wear to any business meetings you arrange.
When you show up to try to d business on a bicycle, wear your good suit and tell the seller that you are serious about doing your share for the environment.
I don’t recomend Ramen for every meal. It doesn’t contain much nutrition. Instead, buy a couple of pounds of dry lentils and rice from the bulk bins. I’d splurge and spend $2 on a can of cheapo curry powder to help me gag down 90 meals a month of lentils and rice. But you can live on it and it’s cheap.
OK, perhaps a little sarcasm there, but I really think that starting out with no money and no base of knowledge and no income to live on would be an awfully tough way to try to do real estate.
If you are down to your last $1,000, then go and get a job, so you can survive until you can do a few deals.
I have done a few no money down deals, and they still take a big chunk of money. Almost every option in real estate involves at least enough cah for carrying costs, and that can be a chunk.
You can bird dog to get enough to get started, but you have to have enough cash to get around and look and to talk to people. Can you do it using the bus system? I supose, if you are really determined, but even the bus isn’t free and it doesn’t go everywhere.
propertymanager
~700-750 - Is that great/good enough?
I have more than 1k, just a random question to draw some more ideas, thankfully! I’ve worked circa 11 years in the restaurant business, averaging 80 hour weeks during this past summer, so I’m game for work:D Lack of experience is my major shortcoming, which I hope to partially offset by learning from those that have been there.
tatertot
Sorry, should have clarified. 1000 discretionary cash (don’t worry about the car/living expenses/etc) + all your current knowledge. And no, I’m won’t be at the other end following you step by step. (Well, if it’s that good… you never know;P)
Alright, as this topic has stagnated, it’s time to move to stage 2.
What if you had two grand? How would that change your plans? *And might as well put in here, 5k, 10k. How would those factor into what your plans would be? Details are good:D Keep in mind this is discretionary. Assume food, housing are accounted for.
Another ?, would anyone in the former group spend any of 1k if that’s all you had on joining an REIA?
Nope! I wouldnt go… When you get to “what would you do if you had a 600,000 budget” I’ll chime back in…
Michael Quarles
Emperor,
You don’t need a fortune but you do need something (either cash or credit) if you want to run a successful business.
Yes, I would join your local REIA even if you only had $1,000 - ESPECIALLY if you only had $1,000!
Mike
700-750 credit score. Is that high enough?
Also, I’m intrigued, MichaelQuarles, what’s so special about 600k?!?
Nothing, I am letting those that have spent less than 600k answer that answer…
When we get above 600k in a budget I may be the only one on the board who has one and can answer your question…
BTW the amount someone spends on a budget is in direct correlation to how much cash flow they have and don’t mistake cash flow for profit. I get a kick when I hear passive income earners brag that they make 5000 a month in income… Let’s party with that… heck my seat at the sky bar last year for new years was 8 grand…
And I don’t like passive income I like MASSIVE income