How to Get Started in Real Estate With Less Than $1,000
People use the excuse that they don’t have enough money to get started in real estate all the time.
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This simply is a fear-based lie, and this post is going to show you how money really isn’t the barrier that you think it is. My hope is that after you read this, all excuses will be stripped away and that this will end up being the day that you decide to take action and change the course of your life.
So let’s get into it!
How to Get Started in Real Estate With Nothing But $1,000
OK, so at this point you’ve gotten serious about jumping into the real estate game and have decided to work a few extra shifts at your job, sell some stuff online, and do a couple of odd side jobs (one of which you got from the “etc.” section off of Craigslist — which is something you’ll never, EVER do again!), and now you’ve bootstrapped your way to $1,000 to get started.
What good is a $1,000 in real estate?
Trust me, it’s more than enough!
But you will definitely need to be wise and choose your steps carefully in order to make this work.
Already we know the typical marketing efforts like mailers, bandit signs (I hate those anyway, at least for my market, they’ve never worked), and print advertisement in general are all out of our price range.
We’re going to have to bootstrap this thing through some good, ole fashioned hard work!
Our First Step: Let’s Get a Game Plan
How my mind typically works in order to accomplish something big is that I need an outline with actionable bullet-points that make the “from-here-to-there” a series of small, manageable steps. For me to create this, the first thing I need to do normally is to start with asking myself some good questions.
- What are the components of my determined task that will yield me 80% of the return I want, while only requiring 20% of the work?
- If I was only allowed to accomplish this task in 5 steps, what would they be?
- If I was limited in terms of resources (you only have a $1,000, right?) what would be the minimal steps I NEEDED to take in order to reach my goal?
For you starting out, if I were you, these are what these questions would lead to:
- Get Educated
- Get Niche And Goal Focused
- Take Action
(Sorry they’re a bit fluffy — it gets better, trust me.)
The single-most important component that will produce the 80/20 principle in your investing pursuits is knowledge.
If you know exactly how to get into deals with little-to-no-money down or how to find free deal flow, then you’ll be able to function on few resources and accomplish your goal in minimal steps.
Now, when it comes to real estate education, there is the guru course method (you’ll eat through your $1,000 quick on that route) and then there is what I like to call the BiggerPockets method.
Naturally, the very first thing I would do using the BiggerPockets method is join the community and here’s why:
- Ninety-nine percent of all I need to be successful is free.
- Ninety-nine percent of everything I learn comes straight from the field, and the pros and cons are clearly balanced by the diversity of the online community.
Here is how you should utilize your membership for bootstrapping:
1. Follow the Forums
Did you know you can get a personal notification every time a new post occurs in the forums? Check this video tutorial on the specifics:
This is a list of forums I suggest to read all day, every day if you’re just starting out:
This forum is designed for the sole purpose of installing the right mindset. If you follow, ask questions and engage, you’ll be equipped with the “internal stuff” that’s needed for success.
2. Starting Out
Here is a forum designed specifically for people just starting out. Feel free to ask all the seemingly dumb and intimidating questions without judgement, and pay attention to the answers. This forum can prevent so many of the mistakes that others have made before you.
This will give you a general overview of how real estate works. It’s designed as a place for people to ask about anything and everything related to buying and selling, which is all you do essentially, in one way or the other.
This is where you graduate from milk to meat! This forum will teach you about wraps, how to successfully get into a deal with no money down, and more. If you’re bootstrapping, this is the area that your knowledge will be most leveraged in your real estate pursuits.
This is the place on BiggerPockets where if you pay attention, you’ll learn how to analyze your deals and crunch your numbers correctly. You have the opportunity in this forum to post your numbers for potential deals and get direct feedback from experts in the field (pretty powerful stuff).
Here is where you will learn everything you need to learn about loans and funding options related to the traditional mortgage or a similar alternative. The more funding options you know about and have access to, the more flexible you can be in your investment pursuits.
Sometimes you need to go outside the bounds of the traditional mortgage (especially if you’re new to the industry and only have a $1,000 to your name). Here is where you learn about all the insanely cool and innovative ways to fund your investments.
Here is the forum that will help guide you on how to set up the financial structure needed once you happen to make money in real estate. It’s important to learn these skills because if you do everything else right and end up squandering all the money you make, it’s all in vain!
9. Decide which one of the following types of real estate strategies meet your goals and needs, then follow the forum related to it:
- Rehabbing and House Flipping
- Real Estate Development & New Home Construction
- Multi-Family and Apartment Investing
Set up a “Keyword Alert” for the name of your area (for example, mine is “Bay Area”) and keep track to see what people are saying and if there are any networking events happening. Going to these events and meetups with active investors in your local area will yield life-changing returns — trust me!
2. Read All the Free Stuff!
1. File Place:
There are some incredible resources in this section of the site — I mean incredible, incredible! Information that people have paid thousands of dollars to get access to and it’s just chillin’ here waiting to be downloaded by you!
There are too may resources to list in full, but there are some honorable mentions I just couldn’t pass up:
This is mentioned a lot on the site and for good reason! This is the crash-course to real estate for beginners. It honestly is a must-read (and dude, it’s free?).
This is an awesome case study of what’s involved in building a spec home from the ground up. It covers everything you’d need to know (and again, 150 pages — free!).
This is the PDF that has had the most impact on me personally. Brandon Turner goes step-by-step in showing you how, on conservative numbers, you can very easily become a millionaire in 7 years through real estate investing.
A must-read for anybody serious about using real estate to get them out of the rat-race, for sure!
I’d suggest reading everything listed here, plain and simple. If you do, you’ll be at an incredible advantage in terms of your knowledge base for real estate.
This is an incredible breakdown of the culture of BiggerPockets, and it serves as a directory to several resources everyone serious about real estate investing should read.
3. J Scott’s Books
We are now venturing into purchase territory, and it’s time for us to spend the first part of our $1,000.
Fifty dollars will get you both books in both hardback and eBook form, and honestly, I’ve never found a better book on these subjects. They are incredible and worth far more than their purchase price!
4. Read These Blog Posts
I went ahead and saved you a whole bunch of time, and outlined the best posts to read to get educated when first starting out:
- The Top 100 Ways To Make Money In Real Estate
- Real Estate is Better than Stocks – Fact, Not Opinion.
- “Boring” Can Be Sexy When Investing in Real Estate
- Passive Real Estate Investing: How to Have a True “Four Hour” Real Estate Workweek
- Investment Property Loans: The Ultimate Guide
- The Ultimate Beginner’s Guide to Real Estate Financing
- The Ultimate Guide to Determining House Flipping Costs
- The Ultimate Guide to Flipping Houses with No Money
- How to Make a Million Dollars from Real Estate: A Step By Step Path
- How to Buy Multiplex with $0 Out of Pocket – An In-depth Look at Creative Finance
- Buying Rental Property: A Step by Step Guide
- Tenant Screening: The Ultimate Guide
- Flipping Houses: The Ultimate Step by Step Guide
- 5 Simple Strategies For Real Estate Acquisition Domination! (You are Going to LOVE #5!)
- How to Rock at Finding a Mentor in Real Estate: The Definitive Guide
- How to “Hack” Your Housing and Get Paid to Live for Free
- Is a Real Estate License Necessary?
- Why Forced Appreciation Makes Multi Family Investing Better, Hands Down.
3. Listen to the Podcast
The podcast have been the most impacting resource for my life personally. I know we’re getting up there in terms of episode numbers, so I went ahead and highlighted the ones that have been most educational in my experience:
- BP Podcast 056: Syndicating Deals, Investing without Tenants, and Tax Liens with Ankit Duggal
- BP Podcast 070: From Zero to Hundreds of Deals in Under Two Years with Grant Kemp
- BP Podcast 055: The Five Steps Needed to Get Any Lender to Say “Yes” with Jimmy Moncrief
- BP Podcast 035: Quitting Your Job, Lifestyle Design, and Being a Traveling Landlord with Paula Pant
- BP Podcast 037: Full Time Income, Part Time Lifestyle Real Estate Investing with Aaron Mazzrillo
- BP Podcast 049: Real Estate Tax Tips, Jokes, and Loopholes With Amanda Han
- BP Podcast 047: Apartment Complexes, NNN Leases, and Commercial Real Estate with Joel Owens
- BP Podcast 008: Learning to Be a Profitable but Ethical Landlord with Al Williamson
- BP Podcast 002: Starting Out with Karen Rittenhouse – Subject To, Direct Mail, and Investing from a Woman’s Perspective
- BP Podcast 039: Dirt Cheap Land Flipping and Reaching Motivated Sellers with Seth Williams
- BP Podcast 052: Buying Apartment Complexes, Raising Millions, and Building a Profitable Business with Ken McElroy
- BP Podcast 067: Overcoming Inaction, Direct Mail, and Becoming an Successful Wholesaler with Tim Gordon
- BP Podcast 018 : Flipping, Marketing, and Wholesaling with Danny Johnson
- BP Podcast 042: Building a Monster Wholesaling Business with Mike Nelson
- BP Podcast 014 : Cash Flow, Creative Finance, and Life with Ben Leybovich
- BP Podcast 028: Note Investing and Raising Private Money with Dave Van Horn
Getting Niche And Goal Focused
So, at this point I’ve just outlined more resources than most people could handle, and the only thing that costs us money was the two books from J Scott, for a total of $50.
You may be stuck on the education step for a couple months, and that’s actually a good thing (the more you know, the more leverage you have, remember?), but once you’re ready to move on, it’s time to get focused and decide on what type of investor you want to be.
Now, there are several variations, but for simplicity’s sake, I’m going to break the lifestyle of aspiring real estate investors into 3 types:
- The Investor/Agent Hybrid
- The Employee With A Real Estate Side-Gig
- The Full-Time Real Estate Hustler
Now, all three have incredible upsides and discouraging downsides, but ultimately, you have to decide which one you want to become and what lifestyle you’re willing to embody while you put the work in to make your dreams come true.
Remember at this point you still have $950. Let’s see what happens down each path separately:
1. The Investor/Agent Hybrid
You need to hustle and get your license so you can cover your bases. Being a traditional buyer/seller agent is a great way to make a good living and to build up capital relatively quick, if you're willing to work!
I’d suggest checking out a convenient online licensing school, as they run typically around $300 and are structured in a way where you can up your study time and be ready to take the test in a few months.
So you now have $650 left, and once you have your license, you’ve officially arrived in full-time real estate.
I would then focus on hustling and make a goal to get 2-3 listings a month and then use the wealth build to a portfolio of multifamily properties, following the track of the 7 Years to 7 Figure Wealth eBook that’s mentioned above.
2. The Employee With A Real Estate Side-Gig
On this track, it’s arguably the easiest to build wealth, though it may take a bit longer than the other two. Since you have stable income coming in from your day job, at this point you could park the $950 and/or add to it, and you could just make your focus saving up for a down payment for your first investment property.
3. The Full-Time Real Estate Hustler
These are your birddogs, wholesalers, and fix-and-flippers. My hat goes off to you hustlers!
These are the ones who are willing to work pretty demanding schedules with a lot of delayed gratification for the ultimate payday, making anywhere between $1,000-$50,000+ in one given transaction (birddogs typically get $500-$2500 for finding deals for investors, wholesalers typically make $2,500-$15,000, and flippers typically make $15,000-$50,000+).
This track can take very little money to be successful, especially if you get creative with your financing, but it takes a lot of work!
If you decide on this track, be prepared for the struggle! If you fight through it, the payday will come and make it all worth it, but there will definitely be hard days.
So you have $950. What do you do?
Honestly, I’d buy some business cards and then save the rest for a rainy day.
You can very easily start off driving for dollars, screening the FSBO section on Craigslist, door knocking, and just general networking, and it doesn’t cost you anything. If you make the connections with the right buyers, you can start off birddogging and build up a marketing budget for mailers and then transition into wholesaling and then onto flipping.
It’s a hard road, but if you’re relentless, this track can be the quickest way to wealth.
3. Take Action
So, here we are at the final step in our game plan. Now that you’ve educated yourself and chosen which type of aspiring investor you want to be, it’s time to put that education to work and throw yourself in the midst of the chaos of real estate investing.
At this point, you should be conducting a similar process to that of what we did in the game plan, only this time it’s for actionable steps to actually getting deals/results in the direction we want to go in.
I know what it looks like for me, but this is where our paths fork.
[Editor’s Note: This post was originally published in 2014. We are publishing it again to help all of the new investors who have since found BiggerPockets. Let us know what you think with a comment!]
How are you going to learn about deals before any one else does as a birddog or wholesaler?
Where are you going to hang your license and where are you going to get the additional funds needed for MLS access and the other perks of being an agent?
How long are you needing to work in order for your investments to replace your day job, and what can you do to make the transition faster?
Be sure to leave your comments below!