Who here has started from scratch?
Fort Worth, TX · Member since 2015 · 76 posts · 13 votes
Who here has started from scratch?
Most Popular Reply
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
10yI found my "REI teacher" by crying my eyes out in a bar...
Here is my personal story.
I was in a bar, and I just lost my job.I am 56 now, but at the time I was 25, fresh out of the US Marines.The year was 1984.Interest rates were high, over 10%.
At the bar was this smiling guy, and he said,
"Who just died?"
I looked at him.He must have smelled the self-pity on my face.
Here is what just happened to me.
I worked for a small firm in Constriction Engineering Products, Johnson Controls, that sold air and water control equipment to large apartment and commercial building contractors. My math and science background helped me.
But the "J O B" paid $400 a week and was an advance on future commissions. I had over $10K in commissions due to me, and asked my boss for my commissions to be paid now.He laughed, and said I would get paid when he got paid.
I got in an argument with him and he fired me.
So, back to the bar....
this guy at the bar said to me,
"Tough break.What are you gonna do now?"
"Look for work I guess," I replied.
So he says, "You like real estate?"You like solving problems for people?"
I was taken aback by that comment. Was this guy trying to hire me or what?
I smiled, and asked him, "are you looking hire someone?"
He chuckled, and said, "Well, I'm always looking for great salespeople that hustle."
Here's what happened. The man's name was Glenn, and he owned a real estate investment company.
He never called it a real estate investment company, he called " a place where we solve problems for people."
The thing that was amazing about Glenn as he knew a little bit about everything and I mean everything.
He knew about business, legal issues, tax issues, marketing, sales, promotion, networking, and most importantly he knew about people (psychology).
The first thing he did was tell me that I have two ears and one mouth, and I should listen more than I talk.
Second thing he did was have me read "How to Win Friends and Influence People" by Dale Carnegie.
Then he taught me how to set appointments with home sellers, go out to their home, and write up a "letter of intent to purchase or lease".
He said to me, "your job is to bring me potential home sellers who will consider a creative offer."
I was very confused the first few months working there. I did not know what a wraparound mortgage was, or a "subject to" was, or what "subordinating notes" was, or what a "lease option assignment" was..
So I stumbled along.
What allowed me succeed was Glenn had an awesome direct mail marketing machine, and even had an appointment setter just for me, so all I needed to do was just get in my car and go talk to 3 to 4 sellers everyday.
I'd use the same presentation with everyone.
And my goal would be to get them all signed onto a "letter of intent to buy for cash or on terms."
One of the things Glenn told me was
"some will, some won't, so what!"
What that means is that
some sellers will do what you want to them to do, and some will not.
The law of large numbers cures all problems.
What surprised me even more is that some sellers would call the office, in 3 to 6 to even 12 months later, because they appreciated my first meeting with them.
Especially some sellers that were very angry with me in the beginning, called me names, said things like "you just try to rip me off!!"
In my first six months I must have seen 20 people a week, 80 a people month, almost 500 people in that six months. I think we did three to eight houses a month grossing between $5-$10,000 per house, and I didn't make that money, Glenn the Owner did.
The arrangement for payment for me was I would make $500 net cash every week, that's cash. No benefits and no 401(k). Was it legal, I don't know. I didn't own the business. I was hired hand.
After a few months, Glen said
"you're do a good job keep it up. I'm going to give you a few more duties.I want to be able to travel so you can run the office while I'm gone."
I was scared at first, having never run a business. I liked the security of a paycheck.
But I loved being able to make decisions, being the captain of my own ship.
I think what made me more pissed off than anything though was making $500 a week, and making bank deposits of 10,000, 20,000, even 30,000 a week.
So after 2 1/5 years of making $500 a week cash, and living frugally, I said the following to Glenn,
"Glenn, I've "I learned so much here. You taught me about sellers, buyers, legal, tax, marketing, there is no way I could have learned this in school.
"I saved up some money and start my office. I wont compete with you. I'd like to give you four weeks notice."
Glenn leaned back in his swivel chair, smiled and said,
"Brian, you're almost irreplaceable here. You came to me knowing nothing and now you know everything you need to know. You never asked for a raise or a partnership stake in the business.
I can honestly say that without you over the last two and half years I would not have made the kind of money that I have. I have two things to say to you before you go onto greener pastures."
My God I was really nervous. What was Glenn going on to say?
"The first I want to ask you is, what took you so long?"
Then he laughed.
"I expected you to hang in there for about six months and move on.
You're really smart and you should have started your own business long ago."
"The second thing I want to tell you is I'm going to give you a bonus, (he takes out his checkbook, and writes this check out) "and I don't want you to look at it until you sit down to car and drive away, deal?"
I said, "deal!"
I got to my car, exhale, and take the check out of my pocket.
It was for $15,000.00.
Back in 1985 that was a lot of money.
In the memo I remember what was written,
"for my good friend Brian."
```````````````````````````````````````````
With everything I learned over that 2 1/2 years, it didn't take me long to be a profitable new business.
I got a modest office space, with neighbors that were white-collar professionals, an attorney and a CPA.
I had a secretary-phone answerer part-time for 3 months, then full time.
And though Glenn even took I had left, he took me to lunch every week, said he missed me.
That first REI business was very special to me.
I have had several businesses since then, but that first one was my favorite.
````````````````````````````````````````````
My wish for all that reads this is I hope you find your "Glenn" and you bust your tail working and reading. And learning. And implementing.
103 Replies
- Real Estate Solutions Provider · Baltimore, MD · Member since 2014 · 571 posts · 452 votes10y
@Steven McPherson Unfortunately I think the 'you need no money to invest in real estate' myth is just that: A MYTH. It's going to take some $$$$. Whether that is to pay for gas to drive to the REIA, or pay for internet service to learn from BPers, or put out bandit signs or qualify for a mortgage or purchase a tax lien or get your real estate license. There is no way around it. Unless you have somebody else that is going to pay for it for you (still someone is kicking out $) that is the only way I can see you getting in the game with no money. All of us have started from nothing though. Meaning we were all once newbies and didn't know what we didn't know. But it can be done. Start saving today. Pay yourself first. Even it's only $10/week. Pick up a second job. Take action!
Check out this blog post about jumpstarting your investment account....
http://www.biggerpockets.com/renewsblog/2015/10/30...
I wish you the best!
Sincerely,
E. Harris
I hope someone replies and proves me wrong!!! I would love to know how someone did it with no $ as well.
- Los Angeles, CA · Member since 2014 · 2k+ posts · 515 votes10y
I started with about $500.00 in the 1990s.
Put a plan together to save some money. Put all your effort into finding way undervalued property. You don't need to buy it. If its a great deal, find the people in the market who buy undervalued property. They will split the margin with you and beg you to find more.
Don't focus on ownership yet, just finding great deals.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes10y
I had money when I started, made a lot more, but lost it all in the crash.
I had a negative net worth when I re-started so you could say I started from less than zero. But I did have experience, a network and a history of success. Someone new won't have a history of success or experience but you can substitute knowledge for experience to some degree.
I I were starting over again I would make sure I had lots of knowledge, knew my market hands down, and lastly I would build my network as much as I could. You can do most of that especially the networking and learning the market for very little money.
- Real Estate Consultant · USA · Member since 2014 · 1k+ posts · 751 votes10y
I have started my Lease Option business in 2 cities, both with no money.
1. Go to all the FSBOs sites and Classified sites to find a motivated seller.
2. Do a paper assessment and put their property under contract. Phone call only.
3. Post the property for Lease Option/RTO/Lease Purchase, whatever you want to call it, on a free classified site.
4. Tenant buyers fills out application on line. I evaluate the tenant. Never show a property unless they qualify.
5. Get my realtor to show the property to prospective tenant buyers.
6. Realtor executes contracts with tenant and collects $10,000.
In fact, that's how I do all my transactions. You have heard the expression OPM (Other people's money). I like to also leverage other people's time ... OPT. So whether it's a realtor or a birdogger or a commissioned salesperson, I don't pay anything until I get money.
- Investor · Brazil, IN · Member since 2015 · 24 posts · 33 votes10y
We started out with nothing and have most of it left. I cash-flowed our properties on contract(bought as one big lump) and paid for all repairs and getting 2 properties going out of my weekly paychecks while paying the mortgage amount at the same time. We came from living off food stamps in a 2 bed/1 bath house that barely had heat to living in a 4 bed/2 bath house with 4 rentals. While I'm still not able to do this full time, we're moving closer to that each and every day. Still not "well off", but we're making it work day by day.
- Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes10y
I found my "REI teacher" by crying my eyes out in a bar...
Here is my personal story.
I was in a bar, and I just lost my job.I am 56 now, but at the time I was 25, fresh out of the US Marines.The year was 1984.Interest rates were high, over 10%.
At the bar was this smiling guy, and he said,
"Who just died?"
I looked at him.He must have smelled the self-pity on my face.
Here is what just happened to me.
I worked for a small firm in Constriction Engineering Products, Johnson Controls, that sold air and water control equipment to large apartment and commercial building contractors. My math and science background helped me.
But the "J O B" paid $400 a week and was an advance on future commissions. I had over $10K in commissions due to me, and asked my boss for my commissions to be paid now.He laughed, and said I would get paid when he got paid.
I got in an argument with him and he fired me.
So, back to the bar....
this guy at the bar said to me,
"Tough break.What are you gonna do now?"
"Look for work I guess," I replied.
So he says, "You like real estate?"You like solving problems for people?"
I was taken aback by that comment. Was this guy trying to hire me or what?
I smiled, and asked him, "are you looking hire someone?"
He chuckled, and said, "Well, I'm always looking for great salespeople that hustle."
Here's what happened. The man's name was Glenn, and he owned a real estate investment company.
He never called it a real estate investment company, he called " a place where we solve problems for people."
The thing that was amazing about Glenn as he knew a little bit about everything and I mean everything.
He knew about business, legal issues, tax issues, marketing, sales, promotion, networking, and most importantly he knew about people (psychology).
The first thing he did was tell me that I have two ears and one mouth, and I should listen more than I talk.
Second thing he did was have me read "How to Win Friends and Influence People" by Dale Carnegie.
Then he taught me how to set appointments with home sellers, go out to their home, and write up a "letter of intent to purchase or lease".
He said to me, "your job is to bring me potential home sellers who will consider a creative offer."
I was very confused the first few months working there. I did not know what a wraparound mortgage was, or a "subject to" was, or what "subordinating notes" was, or what a "lease option assignment" was..
So I stumbled along.
What allowed me succeed was Glenn had an awesome direct mail marketing machine, and even had an appointment setter just for me, so all I needed to do was just get in my car and go talk to 3 to 4 sellers everyday.
I'd use the same presentation with everyone.
And my goal would be to get them all signed onto a "letter of intent to buy for cash or on terms."
One of the things Glenn told me was
"some will, some won't, so what!"
What that means is that
some sellers will do what you want to them to do, and some will not.
The law of large numbers cures all problems.
What surprised me even more is that some sellers would call the office, in 3 to 6 to even 12 months later, because they appreciated my first meeting with them.
Especially some sellers that were very angry with me in the beginning, called me names, said things like "you just try to rip me off!!"
In my first six months I must have seen 20 people a week, 80 a people month, almost 500 people in that six months. I think we did three to eight houses a month grossing between $5-$10,000 per house, and I didn't make that money, Glenn the Owner did.
The arrangement for payment for me was I would make $500 net cash every week, that's cash. No benefits and no 401(k). Was it legal, I don't know. I didn't own the business. I was hired hand.
After a few months, Glen said
"you're do a good job keep it up. I'm going to give you a few more duties.I want to be able to travel so you can run the office while I'm gone."
I was scared at first, having never run a business. I liked the security of a paycheck.
But I loved being able to make decisions, being the captain of my own ship.
I think what made me more pissed off than anything though was making $500 a week, and making bank deposits of 10,000, 20,000, even 30,000 a week.
So after 2 1/5 years of making $500 a week cash, and living frugally, I said the following to Glenn,
"Glenn, I've "I learned so much here. You taught me about sellers, buyers, legal, tax, marketing, there is no way I could have learned this in school.
"I saved up some money and start my office. I wont compete with you. I'd like to give you four weeks notice."
Glenn leaned back in his swivel chair, smiled and said,
"Brian, you're almost irreplaceable here. You came to me knowing nothing and now you know everything you need to know. You never asked for a raise or a partnership stake in the business.
I can honestly say that without you over the last two and half years I would not have made the kind of money that I have. I have two things to say to you before you go onto greener pastures."
My God I was really nervous. What was Glenn going on to say?
"The first I want to ask you is, what took you so long?"
Then he laughed.
"I expected you to hang in there for about six months and move on.
You're really smart and you should have started your own business long ago."
"The second thing I want to tell you is I'm going to give you a bonus, (he takes out his checkbook, and writes this check out) "and I don't want you to look at it until you sit down to car and drive away, deal?"
I said, "deal!"
I got to my car, exhale, and take the check out of my pocket.
It was for $15,000.00.
Back in 1985 that was a lot of money.
In the memo I remember what was written,
"for my good friend Brian."
```````````````````````````````````````````
With everything I learned over that 2 1/2 years, it didn't take me long to be a profitable new business.
I got a modest office space, with neighbors that were white-collar professionals, an attorney and a CPA.
I had a secretary-phone answerer part-time for 3 months, then full time.
And though Glenn even took I had left, he took me to lunch every week, said he missed me.
That first REI business was very special to me.
I have had several businesses since then, but that first one was my favorite.
````````````````````````````````````````````
My wish for all that reads this is I hope you find your "Glenn" and you bust your tail working and reading. And learning. And implementing.
- Insurance Agent · AZ · Member since 2013 · 306 posts · 161 votes10y
@Brian Gibbons Thank you for posting that story. I can't tell you how much it touched me; everyone needs a "Glenn" in their lives, and more importantly, they should strive to one day BE a "Glenn" to someone else.
- Investor · Lakeland, FL · Member since 2015 · 344 posts · 606 votes10y
I tell people that I have a story that was built for late night television. With all due respect to @Eric H. His name was Walter Riddle.
I had seen another classified that was marketing a package of 5 duplexes for 150k (this was the 90's guys) and so of course I called him.
Walter answered and within 5 minutes I knew that I wasn't the buyer for these properties. (He wanted all cash) We did however continue our conversation and again, built a great repor.
It was somewhere around that time that I mentioned the fact that I had this deal on a duplex I was looking for funding on.
"Actually, I'm a mortgage broker too that only works with private lenders," Walter informed me.
"This property sounds like a good deal." "If you want, I'd love to check it out."
I was flabbergasted!! Had I known that he was a private money guy, I would have probably blown the whole thing, but because I didn't, I was able to build a relationship and here was this guy going to fund my deal!! (And that boys and girls is a course in its self)
Long story short, (yeah a little late for that) he looked at the deal and agreed to lend me 18k. "You're going to need some money for closing costs," he instructed.
"You'll also need a couple bucks to touch the place up to get the one vacant side rent ready."
When we closed the deal, I actually walked away from the table with a check for a little more than $800. This was more money than I'd seen in one place in a long time!!
I took the check, rode the bus to the bank and cashed it into small bills. I brought that money home to the weekly mobile home rental we had been demoted to, walked in and threw the money on the bed. I showed the money to my brother, who's eyes widened in awe of this kings ransom. Then we both took turns rolling in the dough!!
By the end of that year with Walter's backing, we had bought and closed on a total of 34 rental units. That gave us a good enough income to move out of that rat pee smelling trailer and into a 3/2 2500 sqft log cabin, (rental) and then a year later, into a 4300 sqft 7br 51/2 ba, 4300 sqft home that looks like something out of loghome living.
Which btw, we had found a year earlier in a real estate photo guide while we were still in our motel room and had marked down as dream house...
But that's another story!!
- Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes10y
I arrived here in '81 with less than $US100 as the company I had contracted with picked up all my expenses. At the time my renumeration was exceptional so I didn't need to bring any more cash from 'home' & the Company did literally pay for everything. (My mileage allowance actually paid off the 3 'work' autos I owned until I retired in '98).
The VP of Engineering (who hired me) told me in a heart to heart to just keep Buying real estate. As interest rates hovered in the double digits of the early '80's, I put every spare $ & free time I had into buying & rehabbing property. Many of those who laughed or patronized me are still working to 401(k) themselves into a mediocre retirement!!!
- Investor · Brazil, IN · Member since 2015 · 24 posts · 33 votes10y
Very cool reading everybodys stories. Makes me feel better about struggling to get our thing going.
- Investor · Cincinnati, OH · Member since 2013 · 2k+ posts · 1k+ votes10y
@Steven McPhersonI had no money in the savings account but I did have a full-time job that I used to squirrel away money until I could afford to buy my 1st house in DFW. Then I bought 3 more. Then I realized that wasn't reaching my goals fast enough so I bought a 168 unit and a 250 unit (most recently) with investors as a general partner.
- Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes10y
While I bought my first property about 4 years ago, I "started" about a year before that. I used Mint.com to see where our money was going. From there I set a budget for us to live off of and allow us to save money. We paid off credit cards, saved up the rest, and bought our first property with a FHA loan and 3.5% down
Second City Real Estate4.821 Reviews - Rental Property Investor · Higginson, AR · Member since 2015 · 123 posts · 101 votes10y
my story is worked a full time job, had a part time job also. Had a friend that was a house painter. he found a undervalued deal. I had the credit. we bought house, 20k rehabbed and rented it. we made no take home money monthly. but we sold it in a couple of years, made the appreciation money, sold for 42k. After all expenses pocked a few thousand each. That gave me the taste for rentals.
like David Dey I watched the late night Carlton Sheets, "no money down" program.
partnered with another friend, and studied, and listened to the tapes. I still listen to them years later. seems like I hear something different every time.
That was 44 buy and hold rentals, 3 flips ago. I'm looking for the next one.
- Mifflinburg, PA · Member since 2015 · 65 posts · 12 votes10y
Wow, lots of motivation in this thread. Thanks for sharing your stories!
- Investor · Jonesboro, AR · Member since 2015 · 241 posts · 132 votes10ySteven McPherson I started with less than nothing twice. The first was growing up in the ghettos with only a single mom as a parent. Not much to eat, utilities constantly being cut off, ect... I battled through that and put my self in a position to win. Then at 21 I had a major surgery that left me unable to walk, nearly blind, deaf in one ear, a facial paralysis and medical bills that exceeded 600k. At this point I was broke, homeless, disabled, terrible credit, ect... Now through the grace of God and hard work, I own multiple properties(some paid off), I have plenty of money, I'm able to function again, life is good!!
- Investor · Lakeland, FL · Member since 2015 · 344 posts · 606 votes10y
Originally posted by @Brie Schmidt:
While I bought my first property about 4 years ago, I "started" about a year before that. I used Mint.com to see where our money was going. From there I set a budget for us to live off of and allow us to save money. We paid off credit cards, saved up the rest, and bought our first property with a FHA loan and 3.5% down
I think this is an awesome "starting from scratch" story!!
You decided what you were going to do, then took the necessary steps to make it happen. You made the investment in making the necessary sacrifices to save enough to have your downpayment. That is truly creating your own opportunity.
Kudos to you!!
- Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes10y
@David Dey - In my opinion it is all about the sacrifices. Do I want to retire at 35? Yes! Well then I can't be drinking non-fat soy mocha double shot with foam drinks that cost $5 a pop.
My husband was a little harder to convince. But as long as the budget isn't completely cutting you off from enjoying life and the things you like to do, then it is a small compromise to make.
Second City Real Estate4.821 Reviews - Investor · Lakeland, FL · Member since 2015 · 344 posts · 606 votes10y
Originally posted by @Brie Schmidt:
@David Dey - In my opinion it is all about the sacrifices. Do I want to retire at 35? Yes! Well then I can't be drinking non-fat soy mocha double shot with foam drinks that cost $5 a pop.
My husband was a little harder to convince. But as long as the budget isn't completely cutting you off from enjoying life and the things you like to do, then it is a small compromise to make.
There's a saying, "if you are willing to do for two years what most people aren't willing to do, you'll be able to do for the rest of your life what most people CAN'T do."
- Tennis Coach, and aspiring real estate investor · San Diego, CA · Member since 2015 · 6 posts · 10 votes10y
great story @david dey!! I am a newbie and was feeling discouraged this morning so reading your story was some good morning motivation.
- Realtor · Decatur, GA · Member since 2015 · 74 posts · 18 votes10y
I am still fairly new, but I started out with about $500. I drove for dollars heavily and sent yellow letters and postcards to vacant homeowners and out of state absentee owners. I also was able to co wholesale with other wholesalers to get a little cash flow. If I could do it all over I would have like to started on a bigger marketing budget, but without it I wouldn't be the wholesaler I am today. :)
- Investor · Corona, CA · Member since 2014 · 746 posts · 372 votes10y
I am just starting out. I graduated college in 2009 and had saved $7000 in 401k while working during school. My husband had about $3000 saved. We cashed out the $10k as a down payment on the condo we now live in. It is our 1st property and bought because we didn't want to spend another year renting.
Now I am a Realtor and plan to do FHA to buy a 2-3 family by spring 2016. We are also looking into creative strategies like rent to own sandwich deal.
- Engineer · Lincoln Park, NJ · Member since 2015 · 21 posts · 6 votes10y
Originally posted by @Brian Hunt:
We started out with nothing and have most of it left.
This line cracks me up. It is like something WC Fields would say or something from that era.
- Birmingham, AL · Member since 2012 · 115 posts · 28 votes10y
Awesome thread! Great stories from everyone!
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