Can you really get started with no money and bad credit ?
Wholesaler · Bunnlevel, NC · Member since 2017 · 25 posts · 16 votes
I keep seeing these Investors advertizing that you can start wholesaling/ rehabbing with NO money and/ or bad credit ? I don't want to pay for these courses only to use up what money I do have to line their pockets. That seems like exactly what they are doing. I know there is probably a way to do it. I just need to know where to turn ? I know I can make it in this business, I just need guidance on how to get started. Thank you, Sharon
@Sharon Tippett I would find a legit investor(s) near you and see if you can work out a deal to find properties for them and receive a fee. That way you have a buyer and all you need to do is find the property. No risk on your side.
I appreciate the advice, my obstacle is no money ( not able to borrow even from family and friends ) and my credit is poor at best, however I am working to rebuild my credit. I am a stay at home Mom and we are living paycheck to paycheck. Even if I can come up with earnest money and due diligence how can I wholesale a property if I don't have the ability to take it to closing ? I don't have any income to even attempt to get a contact to close. My question is if I get a property under contract can I wholesale it without being able to close on it myself ? I am determined to make it. Thank you, Sharon
@Sharon Tippett I would find a legit investor(s) near you and see if you can work out a deal to find properties for them and receive a fee. That way you have a buyer and all you need to do is find the property. No risk on your side.
@Sharon Tippett The best thing you can do is educate yourself and find some way to provide value - Starting out it probably ISN'T finding great deals, which is key to wholesaling.
@Jason Franklin That is a wonderful idea. I hadn't thought of that. I recently met some wonderful local investors at a meeting close to me. I don't know if it is allowed to ask for that kind of help on BP. Thank you so much.
@Thomas S. Thank you for your opinion.
I will just say this I am a determined person. I will not let someone else's negativity determine my success ! I am the Master of My Own Destiny ! I WILL make it !
It can be done but it will take work. First and foremost educate yourself and then educate yourself some more. I am still learning the different ways to buy property using little to no money down. One creative way might be to get a HELOC and use it to finance your first deal. When you wholesale the property, pay yourself back, then reinvest the profit into another property. Do this a few times, keep pulling out any monies you have in the deal until you no longer need to use your money for the deals. At this point you are basically investing with no money out of your pocket, it is other people's money that is financing the deals.
If you want to go a step further, by expanding into other niches, and once the wholesaling side is supporting itself. You could use the HELOC to invest in a couple of rental properties that cash flow every month. Rifi the properties after the seasoning period and cash out. Pay yourself back for the down payment. Again, you will be using other people's money as down payments on future properties.
@William C. I may be misinformed and if I am please correct me. When you wholesale a property you must have it under contract. Once you have it under contract you find an investor to purchase it from you at closing ( double closing ), but in order to get to closing you must have the ability to close on it yourself. Therefore if you have questionable credit , and /or no income ( no income at present ) you cannot get anyone to finance the deal. That is my understanding of the process.
As far as the hard work I have no problem with that I am simply asking for advice to steer me in the right direction. I do appreciate your input. Thank you.
@Rene Montelongo More Great advice. I do have a cash buyer that would like to work with me. You are Awesome. Thanks for your advice. I will do just that. Have a wonderful day.
@Sharon Tippett there are many ways to skin a cat as they say. You can simply assign the contract to the end buyer before you ever even come close to a closing table. skip the double close and never need the ability to close. You'll have to check on your state laws though, some consider that brokering without a license. I guess what my point was, what I have noticed to be a little pattern as people try to get into real estate with no money or no credit is that they come to the conclusion that wholesaling is a good place to start, because that's what the gurus say, and the truth is you can literally put a home under contract with a $1 deposit , never intend to buy it, and assign it an end buyer for a fee. The reality being it's possible, yet darn more difficult than some would lead newbies to believe.
Wholesaling is basically an outside sales job driven by converting leads produced by marketing. The marketing can be bought or produced.
"I want grow up and be a salesperson"
Said no one, ever.
Do you want to be a sales person? Do you have experience in sales? What do you know about marketing? If you don't have seed money, you'll have to produce leads rather than buy them, so you'll have to figure out what works and what doesn't in your marketplace. Is there maybe another sales and marketing opportunity for you to earn money in a sales position to gain the experience and also build some equity towards a down payment or deposit or marketing for sellers?
Wholesaling might be the perfect thing for you. Maybe not. Hopefully asking these question will help you make that decision for yourself. I always think that finding someone to partner with, or show you the ropes of you bring them the deals is the best way to get started.
Happy to answer any questions you have in the future. Regarding the specifics of executing a wholesale deal when you have one in front of you, use the search function you'll find a years worth of reading material on the subject. Actually getting one in front of you is the key to the whole game.
In my personal opinion you would be better served to talk to someone about your credit and get on a plan to increase it. It takes less than a year to make huge changes to credit. Putting the time into that would be better spent. The second thing would be to get rid of current debt and pick up a side job where you stick the money away and have some money to invest. Not trying to be critical at all, but you have to bring something to the table in the investment world. That something us usually the money, which you can get with either the cash or the credit.
There are thousands of people who will take advantage of someone with no money or credit for the little of each they can scrape up. When a deal does pop up they throw a few scraps their way and keep them working. Focus your energy into improving both of those and growth will be much easier (Still VERY hard though). They say less than 10% of all Real Estate agents ever make it past 4 deals (Which is kind of interesting because most agencies have a 4 deal mentor program.....) The amount of wholesalers that start out with zero and work their way up has to be less than 1% by far.
So concentrate on getting some money and some credit and you will be able to make good investments, with neither you have to take any investment and you will lose out most times.
Just my 2 cents and good luck in whatever you decide to do.
Let's not be naive.
Basic economics, look up factors of production, land, labor, capital and entrepreneurship. For any transaction 3 or the 4 must be present, but land is always present and you may substitute 2 of the other 3.
In other words, you will have land, transactions take place on earth, not in space. Land is always utilized one way or another to support any transaction. In RE, it's the subject of the transaction.
If there is a shortage of any of those functions, then more of other aspects must be employed.
I have no cash, so it takes more labor and entrepreneurship or management, substitute any of those to arrive at a successful conclusion.
Credit is not a necessary function, but it sure helps in real estate and finance.
Land is always present, you conduct your business someplace and in RE, it's the subject of the deal.
You will need to provide labor and management if you have no capital.
We can assume you know how to work.
That leaves management, that requires an education! The more you know the more management you can add.
You do not get a proper education from any guru, none, nor do you by following some hustler or fast talking wheeler dealer off the internet.
BP is marketed as an education site for real estate investors, that's marketing (what I call the art of deceit), what it is is a social site, designed to generate activity that is the basis for any internet business. Money is made by dues, advertising and the sale of materials which do not teach management or real estate in a conventional manner for business.
Being young and new to the world of business you have another hill to climb.
Business!
Everyone on BP has been a consumer, they believe that teaches them how to conduct business.....couldn't be more wrong, that experience is one sided as a consumer, or perhaps from an employee position, that is woefully lacking a business knowledge.
Being motivated and excited doesn't take the place of a proper education, never has and never will.
The internet and real estate are full of sizzle salesmen, selling the sizzle without any or very much meat., Newbies mistake this as learning real estate, you're not, you're learning how to be a hustler.
Ron La Grinch does not teach real estate or business, he shows sizzle and how to hustle a deal, it's not even business in this industry.
Now, in general, lets take the average youthful person. Intelligence has nothing to do with being naive, that goes to wisdom, that goes to maturity and experience, no youthful person has these under their belt yet. What eagerness breeds is misjudgment and the lack of due diligence. We can also toss in lazy, but that's not totally correct, it's about attitude of wanting things now without putting forth the needed effort to benefit as many believe they are entitled to.
So, a slap of reality, you're not ready to be "in business". But, you also have to try and fail to learn. Success is a long line of failures. An education keeps you from failing as much and it allows you to enter the business realm with less liability, keeps you in a position to manage your affairs and do so legally.
You may have seen me say that real property is not personal property and we do not deal with it in the same way, it is not managed alike. You never learned the difference being a consumer of personal property, no one does.
As mentioned, land is a basic function of economic transactions, not cars, or bananas or shoes. Land transactions are highly regulated and for good reason, if land ownership were not possible in our economy your world would be much different.
We have the gurus, con artists, wheeler dealers and hustlers who totally ignore ethics, laws, regulations and good business practices (unknowingly and intentionally) for money, that is your money. Your only real defense in any business from getting scammed is an education and experience. You'll have to begin with an education.
The road to hell is paved with good intentions, wanting to be right isn't always the right thing.
Lastly, hearing "how to" from someone with experience can be dangerous to your future. We have many old hands at real estate pitching outdated dealing, they never stayed current. The other issue is those who only learn by experience usually didn't really learn the right way or the ethical and legal way, they made (or took) money and didn't get slammed in jail (they don't tell you of their past troubles either). So, it's not just experience you need to consider but listening to but who's experience is it! Understand who you're listening to!
I've done many deals without using my money, my credit was never an issue in most of my dealings.
What can be critical is the perception of others thinking you have good credit, that really is based on your ethical behavior, how you present yourself professionally......again, education is the foundation here. Your integrity is more important than credit!
If you do deals that skirt laws and regulations, you're not really ethical, that type of person usually has bad credit, they resort to under handed tactics because they are desperate, don't be desperate. Don't let motivation and eagerness turn into desperation.
Just like any other industry, a core education is necessary to ensure success, an education doesn't guarantee success, but neither does being naive or under handed, a good education is your best path.
Good luck :)
@Sharon Tippett The best way to do no money, is learn how to analyze a property, analyze 100 of them, make a short marketing package for the top 3 or so, and then go meet investors and tell them about it. Let them know what you can do and then offer them a return on their money if they invest with you. If you can find a deal where you can make money on top of offering 12% back to investors you're in a good position.
@Jonathan Johnson, Thank you for the advice. The members of BiggerPockets are Awesome.
@Sharon Tippett My advice is connect with someone that is doing great things in your area and see if you can offer your services whether it be cold calling for them managing their CRM, helping them with their direct mail, posting for them via social media etc. You'll begin to gain an incredible amount of knowledge and maybe able to help them find a deal. Which in turn will lead to them hopefully paying you nice little fees along the way.
Ms. Sharon a lot of folks like @Cody L. @William C. @Bill Gulley have made a lot of great points.
Just a few thought.
When a course is advertised as No Money No Credit: What they forget to say is you YOU NEED BRAINS & Work Ethic.
If they said No Money/ No Credit will need a **** load of work ethic and you must have brains no one would guy. Additionally it will require a hell of lot of hoops to jump through before you succeed no one would every join.
If you have ever wanted to loose weight or do anything we live a society where people want to be rich, sexy and happy all the time with little to no work. We want to find a software or an app that will do everything. If we as a society can sit on the beach and eat boon boons and then we are all for it.
Keep in mind if someone is an expert or has a lot of experience in real estate they can do No Money/ No Credit deals why? Because they have all the other pieces already in place. So they can borrow, partner, wholesale or do all sorts of things on a deal. They have credibility and proven record people will jump through hoops to do deal with them.
When someone start out and asks can you do No Money/ No Credit deals. The answer is yes.
BUT there is a catch.
If you are getting started it will be a hell of a lot tougher for you than people who have already paid that price.
My suggestion: Do not believe any claims on the internet. There are a lot of folk who are real hero's on the net and complete zero's in real life. Go do your own research. Go meet investors in your area. Do online research. Look up your assessors records or have your agent pull past sales in your area and look up who is doing multiple transactions that you want to do then go talk to these folks. Verify the real investors that have a history and do multiple transactions.
Ask them a simple questions. If I bring you a deal will you partner with me on the deal even if I can get a small percentage of the profit. Rather than just a wholesale if you can somehow be a part of the transaction you will learn a lot more.
Then start looking for deals.
A great deal will always get a seasoned investors interest.
You show a bottle of booze to a guy who loves to get drunk they will come running.
Good real estate investors are like crack addicts. They are just hooked on great deals rather than crack.
Get to know one area of your town. You need to know every sale in the last 6 months in the area in the price range you want to work in. What price where good flips bought for? What did they sell for?
How much work was done. (Approx). A lot of this data is available on the net now a days. You will also have to start driving some of these areas. The key is to understand
Retail Fixed Up Price (ARV) Vs. Distressed MLS sales (What average person thinks is a good deal) Vs. What seasoned investors would pay for a property.
Every community, zip code based on the type of properties will have a pricing structure. Once you understand what is a great deal vs just bs properties life becomes simple.
You may miss out on a lot of deals initially it's ok.
If you look at most people who succeed they have all gotten a lot of bloody noses. As long as you don't loose money that is all that matters. It's a numbers game.
Here is a fun challenge:
Look at 30 distressed properties in your area just for the MLS
Then go and look up 30 homes that you think are really nice versions of those
Then look up the past 12 month sales vs 6 month sales of similar homes in the same area.
You will suddenly start finding some good deals just off the MLS.
Now if you can do the same on off market deals you really have something.
@Sharon Tippett there are many ways to skin a cat as they say. You can simply assign the contract to the end buyer before you ever even come close to a closing table. skip the double close and never need the ability to close. You'll have to check on your state laws though, some consider that brokering without a license. I guess what my point was, what I have noticed to be a little pattern as people try to get into real estate with no money or no credit is that they come to the conclusion that wholesaling is a good place to start, because that's what the gurus say, and the truth is you can literally put a home under contract with a $1 deposit , never intend to buy it, and assign it an end buyer for a fee. The reality being it's possible, yet darn more difficult than some would lead newbies to believe.
Wholesaling is basically an outside sales job driven by converting leads produced by marketing. The marketing can be bought or produced.
"I want grow up and be a salesperson"
Said no one, ever.
Do you want to be a sales person? Do you have experience in sales? What do you know about marketing? If you don't have seed money, you'll have to produce leads rather than buy them, so you'll have to figure out what works and what doesn't in your marketplace. Is there maybe another sales and marketing opportunity for you to earn money in a sales position to gain the experience and also build some equity towards a down payment or deposit or marketing for sellers?
Wholesaling might be the perfect thing for you. Maybe not. Hopefully asking these question will help you make that decision for yourself. I always think that finding someone to partner with, or show you the ropes of you bring them the deals is the best way to get started.
Happy to answer any questions you have in the future. Regarding the specifics of executing a wholesale deal when you have one in front of you, use the search function you'll find a years worth of reading material on the subject. Actually getting one in front of you is the key to the whole game.
"I want grow up and be a salesperson"
Said no one, ever.
I object. I knew I wanted to do sales since I was a kid. It was my only "real job" prior to RE and those skills have served me very well in my RE career.
Sales was the only job I could see where I wasn't capped. I didn't want a job where I knew I was going to simply make $x/hr. I'd be unhappy with almost any $x number. I wanted my income to be based on what I produced. So I did sales. And did well.
I am not a wholesaler, however I am attempting to figure out low cost ways to market for properties. So far I have come up with using Craigslist ads. Oddly enough I have been contacted multiple times by interested parties looking to sell. I also have considered opening a Facebook page to assist in my online marketing.
I also have been meeting with current landlords and just asking them if they were looking to sell. Oddly enough I got leads this way too.
The next thing I am going to do is a direct mail campaign. I have been driving around and writing down addresses of properties that fit my criteria and I am going to mail them all. I also bought a list from listsource. I am willing to spend money to find the property that I want.
@Cody L. I agree with you. I am really good at sales. I may not have thought that growing up, but I know that is what I am good at.
I can't help but laugh every time I hear the Ron Legrand ad on the radio - No money, no credit, no education, no licenses.... no brains, no work ethic, no nothing. Easy as putting on your pajamas! Thumbs up to you, Rpn!
What we have here is an income crisis. Tons of education is free. Turn off the tv. Listen to podcasts instead of the same music you've heard over and over. Dump the car payment. Brown bag your lunch and brew your own coffee. Learn and network. Fun is time in the park. Movies are borrowed from the library. Learn and quit spending.
@Steve Vaughan Everybody's situation is not the same. Sitting in judgment of others is easy when you haven't walked in their shoes, we are very frugal !! Cars are paid for ! Eating sandwiches and hotdogs, NOT eating out, we brew our own coffee. We don't leave the house except to go to the store and work. NO we don't buy Prime rib and steak. Like that is any of your business. Networking on BP. We don't go to the movies or even rent them. We don't have cable or satellite, just internet, I guess the next suggestion would be give up our home and cars and live in a box !! I bet we could save money then !! So if you can't say anything of importance to encourage people please keep scrolling !! Thank you and have a nice day !!