I'm frequently asked the same questions over and over and I want to answer those questions in this blog post. If you have a similar question, you'll find the answer here.
Here are the questions I get asked all the time…
"Hey DM, I want to become a real estate investor but I don't have thousands of dollars in cash just laying around to buy"
Or
"Hey DM, I want to become a real estate investor but my credit isn't perfect so I don't think I can get a loan".
Or
"Hey DM, I want to become a real estate investor but I don't want the hassles of becoming a landlord and paying property taxes and dealing with tenants."
I get questions similar to these all the time. They're all related to one issue and it reveals a common misconception in real estate investing.
Myth: You need a briefcase stuffed with cash
These questions reveal one of the biggest misconceptions in real estate investing – people think that in order to invest in real estate, they need to have a big briefcase of money they can put down on every deal in order to buy a house so they can resell, rehab, or rent it out. (And they think that if they don't have that briefcase of money, their desire of getting out of their dead-end job will never be fulfilled). They think that the only thing standing between them and a successful (even wealthy!) future is that elusive briefcase of money they just can't seem to get their hands on.
Myth... BUSTED
That myth is completely false. You don't need a big stack of greenbacks stuffed into a briefcase in order to become a real estate investor. And, you don’t even need great credit in order to become a real estate investor.
In fact, I'm going to show you in this blog exactly how to be a real estate investor without spending a cent of your own money or borrowing money against your credit. It's the same way I became a real estate investor when I first started out – and I didn't have a briefcase full of money and no credit at all!
And here's even better news: You don't have to go begging to hard money lenders to ask them to fund your deals! (I'm not against getting money from hard money lenders as that can be an option but it can be time consuming and I'd rather be doing deals than borrowing money from hard money lenders).
Really??? DM, I’ve heard you can buy property without using your own cash and credit? Is that true?
Most have heard of this... but most people misunderstand it!
The answer is wholesaling. With wholesaling, you don’t have to spend a cent of your own money; you don't have to access your credit.
I'll describe (in a simplified, high-level overview) how you can wholesale properties without spending a dime…
1. You find motivated sellers and you gauge their interest with a Letter of Intent (LOI) to see how motivated they are.
2. If they sign, you research the deal to see if it’s going to make sense to move forward on.
3. If the deal makes sense then you do a contract with the seller – this puts the seller in a position where they can’t sell to anyone else, (protects you as the buyer).
4. Then you offer the contract to investors – people who want to buy properties so THEY can rehab or rent them. The investor pays you a fee to have the contract assigned to them.
5. You collect your fee and assign the contract to the investor. They buy the property and everyone lives happily ever after.
I don’t advocate stringing sellers along. That’s why I always say build a buyers list. From my experience, if you shoot straight with the seller they typically are fair about the deal. If you don’t have a clue about how to sell the deal then I’d say learn that part and start building a buyers list and then go get sellers (they are everywhere by the way). But remember that word karma... just give it your all to sell the deal and if it’s not working out the way you need it to then work with the seller and re-negotiate or cancel the contract. (DISCLAIMER) I'm not a lawyer; I'm just telling you what I would do in your situation. Remember that every situation is different and you shouldn't blindly follow my advice without talking to your own lawyer and considering how my ideas apply in your specific situation.
The above steps are pretty simplified and I write a lot of blog posts and books and other resources to help you do these things. At no time did you spend a dime or use your own credit. Why? Because what you're really "selling" (to an investor) is the contract – the ability to control the property. You're a real estate investor but you're profiting from a paper contract instead of the walls and roof. Again, you are controlling the contract – NOT buying the property! (Re-read that last sentence a few times until you get it!)
A great book you can get for peanuts on a more in-depth conversation about this (as well the documents you will use to close deals) can be had by CLICKING HERE.
Five reasons why wholesaling is a great way to break into real estate investing
I love wholesaling because it's an easy way to get started in real estate investing.
- You can do it without cash or credit to do a deal
- It doesn't tie up your capital into a physical structure that might or might not sell. (You minimize your downside risk)
- Because you have no capital in the deal, you aren't limited to the amount of deals you can do at one time – do one or five or fifty deals at once (as long as you have a system set up to handle the volume).
- There's no work to be done on the property because you never actually own the property (I do a lot of wholesaling and I never even SEE these properties!). Bonus tip: You can hire someone to clean up the yard and trim the bushes or paint the front and kick up the curb appeal if you think that is going to get you more money… Often times you can ask the seller to do this but you handle the task by hiring people and the seller pays the help. (This is how you position it to the seller: You're doing it to get them more money for the deal) :)
- There's zero financial risk (IF you do it the way we do it) because if the deal doesn't happen, you lose nothing except a little bit of time (however you learn from doing). Simply rescind the offer, learn and go on to another deal
I can't think of another business that has as little downside and as much upside! (Heck, even your 9-5 day-job has greater risks – risks that you'll lose your job or that your pay raises won't keep up with inflation or that gas prices go up, etc.). Check out this blog post to see how wholesaling can help you retire in 12 months or less.
Your risk-reducing, reward-increasing friend and mentor,
Mark Evans DM,DN
PS, Don't forget to check out my latest book -- Virtual Real Estate Investing Made Easy -- if you want to learn more about virtual wholesaling the way I do it!
Click here to learn more about Virtual Real Estate Investing Made Easy
Click here to learn more about Virtual Real Estate Investing Made Easy
Muchas gracias. ?Como puedo iniciar sesion?