Real estate investing for felons

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Real estate investing for felons

Pierce Dandridge
Busser · Elk Grove, CA · Member since 2015 · 7 posts · 3 votes

Hello, I've  been convicted of a bank fraud felon on April 2011. Im have completed my sentence (17 months) and Im no longer on probation (supervise release). 

How can I invest in real estate so I can really get my life back on track. Im a busser at a upscale restaurant near Sacramento, CA and I work for a temp agency when needed. Im trying to avoid getting another job to save up money. My income is about $2000/month and of course I have bills and horrible credit.

Any suggestions would be great, thanks!

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Trevor Ewen
Rental Property Investor · Weehawken, NJ · Member since 2014 · 1k+ posts · 704 votes
11y

@Pierce Dandridge

Welcome to BP. Unfortunately our economy is not particularly friendly to people with criminal records. For my part, I think this is shame, because everyone deserves a second chance. Furthermore, you want to work, so it's terrible to let that go to waste.

I would recommend getting involved on the contracting and property management side of the biz. You can throw your time into the mix, and not have to put up a lot of money. I imagine for the first few years, this will be actual work, and much less investing. Eventually, after establishing a track record, start to take a piece of the deal(s) that come through. If your reliable, investors will be happy to give you a taste.

Your record will make people do further due diligence when working with you. However, given time, you can develop trust and work directly with investors who need a pro, if you want to be that pro.

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  • Trevor Ewen
    Rental Property Investor · Weehawken, NJ · Member since 2014 · 1k+ posts · 704 votes
    11y

    @Pierce Dandridge

    Welcome to BP. Unfortunately our economy is not particularly friendly to people with criminal records. For my part, I think this is shame, because everyone deserves a second chance. Furthermore, you want to work, so it's terrible to let that go to waste.

    I would recommend getting involved on the contracting and property management side of the biz. You can throw your time into the mix, and not have to put up a lot of money. I imagine for the first few years, this will be actual work, and much less investing. Eventually, after establishing a track record, start to take a piece of the deal(s) that come through. If your reliable, investors will be happy to give you a taste.

    Your record will make people do further due diligence when working with you. However, given time, you can develop trust and work directly with investors who need a pro, if you want to be that pro.

    5Reply
  • Anthony GaydenPro Member
    Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
    11y
    Originally posted by @Pierce Dandridge:

    Hello, I've  been convicted of a bank fraud felon on April 2011. Im have completed my sentence (17 months) and Im no longer on probation (supervise release). 

    How can I invest in real estate so I can really get my life back on track. Im a busser at a upscale restaurant near Sacramento, CA and I work for a temp agency when needed. Im trying to avoid getting another job to save up money. My income is about $2000/month and of course I have bills and horrible credit.

    Any suggestions would be great, thanks!

     I would be very careful, especially with what you were convicted. It might make working with banks an impossibility. Keeping that in mind, you may want to research areas of buying real estate without banks, including owner financing, private money, subject to, etc. 

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    3Reply
  • Fareed Travis
    Investor · Kent, WA · Member since 2015 · 3 posts · 4 votes
    11y

    I would suggest wholesaling deals to other wholesalers and or cash buyers. I would also suggest that you need not disclose to potential cash buyers or wholesalers the fact that you are a felon. Cash buyers and wholesalers only care about the numbers and soundness of the deal. All nominal transactions would be handled through escrow. So All monies are safe and secure from potential theft and or fraud.

    3Reply
  • Brian Gibbons
    Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
    11y

    Creative financing

    Subject to, lease options,  wraps, private landings  Ira loans

    Get a coach

    Avoid banks

    @Pierce Dandridge

    2Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    11y

    @Pierce Dandridge, welcome to BiggerPockets.

    While you do face more challenges than others on this site may face, that doesn't mean that you cannot find some way to invest in real estate. Without a lot of money, purchasing properties in CA isn't really feasible. That doesn't mean it can't be done.

    What do you bring to the table? Some people bring money, others bring connections, and yet others bring construction skills.

    Connecting with someone to learn the skills you don't have is a great first step. You might not be paid any wages, but the skills you learn can take you far. Once you learn the skills, you put them to work, and while working, you make connections. 

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    5Reply
  • Bill P.
    Investor | Syndicator | Instructor · Cincinnati, OH · Member since 2008 · 435 posts · 198 votes
    11y

    @Pierce Dandridge As @Brian Gibbons said, your best bet would be to study creative finance techniques. With no money and no credit, this would be your best bet. But as @Mindy Jensen pointed out, CA is a much harder state to do creative finance unless you are away from the big metro areas. Just keep on working your regular job and work on your credit, network and study. If you stumble upon a deal, don't be afraid to work with other investors to learn the ropes. Good luck to you on your endeavors.

    1Reply
  • Brian Gibbons
    Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Bill P.:

    @Pierce Dandridge As @Brian Gibbons said, your best bet would be to study creative finance techniques. With no money and no credit, this would be your best bet. But as @Mindy Jensen pointed out, CA is a much harder state to do creative finance unless you are away from the big metro areas. Just keep on working your regular job and work on your credit, network and study. If you stumble upon a deal, don't be afraid to work with other investors to learn the ropes. Good luck to you on your endeavors.

    In the west, I would not be in CALI, look a UT, WASH, NV for cheaper properties where REI is cheaper, and more creative deals can be done.

    I live in LA and buying on terms for a $900K modest house in Sherman Oaks CA is tough, but in Las Vegas NV its alot easier to find a starter home at $150K.  But can be done in Modesto or Bakersfield.

    And creative financing, like buying on sub2, lease option, wrap, etc, is alot easier with cheaper homes. 

    OH, PA, GA is also great.

    CA, DC, MD, VA all tough.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Brian Gibbons  Sacramento has many properties under 100k  just FYI

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    1Reply
  • Brian Gibbons
    Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
    11y

    Yup, used to live in Colfax/Nevada City.

    Family in Roseville.

    Most of the cheaper properties are off of the I5.

    Thanks

    @Jay Hinrichs

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Brian Gibbons  just like people think of Real Estate in Michigan as being like Urban Core Detroit  (which of course it is not)

    Not all property in CA is 500k and up.  my rule of thumb is anything from Sonoma county and within about 35 air miles of the Pacific Ocean and all the way down to the Mexico border is going to basically be high value RE.. that most folks think of when they really don't know CA real estate..  But there are many many areas of CA.. that have sub 100k opportunities. Of course they will be rougher generally Urban Core demographics but still deals to be made. And when you get into smaller communities they can be nice little bergs as well.

    I did a lot of deals in Nevada county in my day... Lake Wildwood I was a principal in the last phase that got built out in the late 80's  ... by built out I mean all the lots... its now 100% built out with homes.

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    0Reply
  • Pierce Dandridge
    OP
    Busser · Elk Grove, CA · Member since 2015 · 7 posts · 3 votes
    11y
    Originally posted by @Trevor Ewen:

    @Pierce Dandridge

    Welcome to BP. Unfortunately our economy is not particularly friendly to people with criminal records. For my part, I think this is shame, because everyone deserves a second chance. Furthermore, you want to work, so it's terrible to let that go to waste.

    I would recommend getting involved on the contracting and property management side of the biz. You can throw your time into the mix, and not have to put up a lot of money. I imagine for the first few years, this will be actual work, and much less investing. Eventually, after establishing a track record, start to take a piece of the deal(s) that come through. If your reliable, investors will be happy to give you a taste.

    Your record will make people do further due diligence when working with you. However, given time, you can develop trust and work directly with investors who need a pro, if you want to be that pro.

     Thank you Trevor for this advice. After I saw this post I started looking for investors on craigslist who needed help in Sacramento. I think this is a good way to start off.

    0Reply
  • Pierce Dandridge
    OP
    Busser · Elk Grove, CA · Member since 2015 · 7 posts · 3 votes
    11y
    Originally posted by @Brian Gibbons:

    Creative financing

    Subject to, lease options,  wraps, private landings  Ira loans

    Get a coach

    Avoid banks

    @Pierce Dandridge

     Do you have a suggestion as to where I could find a coach? Im looking on Craigslist so far and this site.

    0Reply
  • Brian Gibbons
    Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
    11y

    For free

    Type in the search bar

    "Brian Gibbons lease option sub 2 wrap"

    That will get you about 1000 pages lol

    Did I say for free???

    0Reply
  • Pierce Dandridge
    OP
    Busser · Elk Grove, CA · Member since 2015 · 7 posts · 3 votes
    11y
    Originally posted by @Bill P.:

    @Pierce Dandridge As @Brian Gibbons said, your best bet would be to study creative finance techniques. With no money and no credit, this would be your best bet. But as @Mindy Jensen pointed out, CA is a much harder state to do creative finance unless you are away from the big metro areas. Just keep on working your regular job and work on your credit, network and study. If you stumble upon a deal, don't be afraid to work with other investors to learn the ropes. Good luck to you on your endeavors.

     Thanks for the advice, where is a good place or book to study creative financing?

    0Reply
  • Bill P.
    Investor | Syndicator | Instructor · Cincinnati, OH · Member since 2008 · 435 posts · 198 votes
    11y

    @Pierce Dandridge Right here on BP where there are plenty of articles on creative finance techniques.  Search for "subject-to", lease options and sandwich lease options to get you started. Do it here and do a general Google search as well. Go to the library and search for RE books on the subjects and see what they have on Amazon. It isn't rocket science, you just have to be focused for success. Good luck!!

    1Reply
  • Brian Gibbons
    Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
    11y

    Like Bill said it's not rocket science but you need to know the basics of negotiation and marketing, and find a wonderful contract attorney

    Search sub2, lease option, wrapped around mortgage, etc.

    1Reply
  • Stephanie Garcia
    Sacramento, CA · Member since 2014 · 73 posts · 16 votes
    11y
    0Reply
  • Trevor Ewen
    Rental Property Investor · Weehawken, NJ · Member since 2014 · 1k+ posts · 704 votes
    11y

    @Stephanie Garcia

    No. My closest investment is in Trenton, NJ. New York investing is very capital intensive. This is one of the least landlord friendly cities in the US, and rent/value ratios are terrible. 

    Others make a lot of money here, and there certainly foreign demand for flips and new developments right now. For me, the money and effort in is so high, I would have to be doing it full time. Bad town for cash flow, and that's my goal.

    0Reply
  • Ryan Dossey
    Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
    11y

    Honestly I don't think being a felon will stop you. You're looking to do this on your own not work for someone. At the same time you MUST operate 110% above board in all of your dealings. If you screw up... Guess what the persons first words are going to be? Yep. You got it!

    0Reply
  • Stone Teran
    Investor · Cincinnati, OH · Member since 2015 · 374 posts · 120 votes
    11y

    Do banks even pull criminal records on prospective borrowers?

    0Reply
  • Stephanie Garcia
    Sacramento, CA · Member since 2014 · 73 posts · 16 votes
    11y

    Whats foreign demand for flips?

    0Reply
  • Peter MacKercherBusiness Member
    Residential Real Estate Broker · Saint Louis, MO · Member since 2014 · 1k+ posts · 567 votes
    11y

    @Pierce Dandridge

    I'll second @Trevor Ewen's advice, and it's the exact same I'd give you and almost anyone else looking to start in the business without experience or much capital to start. A big part of real estate is trust, and you are coming into this with a disadvantage having a criminal record, but you know that already. Of course there are people without records who are less trustworthy than someone with a record, but it'll be your job to prove that people can trust you moving forward. Use your motivation and try to learn as much as you can here; the forums have a lot of information, as do the blogs, and there are a lot of lists and posts about great books you can dive into.

    If you can find a property management company to work for you'll learn from the ground up, which I think is far more valuable than trying to come in top-down. You could also go work for an investor doing whatever or wait until you have some experience and then offer your services (probably for free) to an investor who could use another hand on deck in exchange for their time and knowledge.

    Keep at it and you'll be OK.

    [email protected]
    1Reply
  • Pierce Dandridge
    OP
    Busser · Elk Grove, CA · Member since 2015 · 7 posts · 3 votes
    11y
    Originally posted by @Ryan Dossey:

    Honestly I don't think being a felon will stop you. You're looking to do this on your own not work for someone. At the same time you MUST operate 110% above board in all of your dealings. If you screw up... Guess what the persons first words are going to be? Yep. You got it!

     Excellent point. Thank you.

    0Reply
  • Pierce Dandridge
    OP
    Busser · Elk Grove, CA · Member since 2015 · 7 posts · 3 votes
    11y
    Originally posted by @Peter MacKercher:

    @Pierce Dandridge

    I'll second @Trevor Ewen's advice, and it's the exact same I'd give you and almost anyone else looking to start in the business without experience or much capital to start. A big part of real estate is trust, and you are coming into this with a disadvantage having a criminal record, but you know that already. Of course there are people without records who are less trustworthy than someone with a record, but it'll be your job to prove that people can trust you moving forward. Use your motivation and try to learn as much as you can here; the forums have a lot of information, as do the blogs, and there are a lot of lists and posts about great books you can dive into.

    If you can find a property management company to work for you'll learn from the ground up, which I think is far more valuable than trying to come in top-down. You could also go work for an investor doing whatever or wait until you have some experience and then offer your services (probably for free) to an investor who could use another hand on deck in exchange for their time and knowledge.

    Keep at it and you'll be OK.

     Thanks  Peter for that advice. Do you think Craigslist job postings about real estate assistants are good places to start?

    0Reply
  • Jimmy Humphrey
    Underwriter · Charlotte, NC · Member since 2015 · 30 posts · 15 votes
    11y
    While you won't be able to get a job at a bank because of CFPB rules about hiring those convicted of financial crimes, you are still eligible to take out mortgages and fully invest in real estate. Of course, if your credit score is trashed as a result of your crimes, you might end to work on rebuilding your credit first. Of course, such will take several years. But if investing in real estate is something you want to do, you should be good. The only thing that might slow you down is if you show up on a particular internal fraud alert system for some banks. But even then, you aren't likely to be denied for most mortgage products.
    1Reply
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