Financing Advice

4 Replies

Hello. I am in a bit of a corner. I was misguided when I started my own home improvement company. This led me to using up the majority of my personal credit to find my personal and business expenses. Now I am having difficulty obtaining a loan. Company is too young and credit utilization is too high.

I want to pursue investing in real estate because it is familiar to me and I know it is one of the few career paths that can help people reach financial independence. Everyone has heard the "no money needed" jingle before, but I want to know the truth of it. Is there really a secret out there ? Did I miss the memo?

There are several podcasts and blog posts that deal with this very issue.  I recommend you check those out.  In the meantime, yes, you can get into the world of real estate investing with no money, but it isn't at all as easy as the gurus want you to believe.  First, unless you can find an investor or partner who will put up the money for a down payment, you're probably limited to wholesaling.  Wholesaling can be done with little to no money.  However, you'll need to be very hands on to make that work.  If you have no money at all to put into it, you're going to be limited to driving for dollars, Craigslist calling, scouring local court filings for Notices of Default and other foreclosure proceedings, and/or probate filings.  Then you can either try to find phone numbers for those property owners, knock on doors, write individual letters, etc.  If you have a little money to put into it, you can look at bandit signs (only where/if they are legal) and/or direct mail marketing for deals.

Again, there's lots of information on BP, and I would start with the podcasts.  For a take on no money house flipping, start with podcast #50.

You have to be willing to put in a lot of leg work, time, and frustration if you have no money or even if you do have the capital. It is very possible though to make good money at it. No offence to the agents out there, but most are lazy and don't hustle to get the deal done.  Point blank if you find a "good deal" odds are you can find someone willing to invest so that you and they make money from it. It all about making a "GOOD DEAL"

One of the larger buy-sell real estate guys that I consider a friend began as a contractor and still uses contracting as the foundation of his investment business. 

This permits him to buy fire-damaged properties and intelligently bid correctly. It allows him to build new construction when the markets supports the practice. Of course, he always has crews available to renovate his retail houses and rental units. 

I suspect he has discovered how to use other investors' money to improve their properties and make a profit for his enterprises and reinvests the profits into his own projects. 

You may be able to partner with someone that has money and good credit. With your construction background, you can bring a lot of value to the table towards a flip project for sure. 

I'd continue learning all that I can about the investing/business side of flipping/rehabbing while networking with a lot of local investors. A contractor that's honest, on the ball, understands the investor side of things, and can complete projects within the budget and on time, can make a great partner :)

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