No Money, No Savings. What To Do.

63 Replies

Hey BP friends. I'm 22 years old, and I'm from San Antonio. I want to start investing, but I don't really have a whole lot going for me right now. any ideas on how I get get financing for my first deal? I'm hoping to start in January.

Option !:Find a deal make it a good one.  Then put it under contract with contingency, find a new buyer for the home. Double close the same day.  make about 5k do that till you have some serious cash for down payment and closing cost.

Option 2:  Find a great deal, find an equity partner. 

Option 3: Find a family member or friend to help you with cash

Option 4: Seller financing 

Option 5: Read and learn everything you can while saving some cash.  Eliminate all extras in your life so you can get your first down payment and closing costs. 

If you have any questions tag me so I can answer them. 

I like @Michele B. 's #1. Lets focus on the first part of it. This is the MOST important part. FIND A DEAL.

You have to have a deal to start with. Get out there and find someone who needs to get out of their property because they are behind on their mortgage, behind on their taxes, inherited a house that they dont want or cant afford, they have a rental property that they need to get out of, someone is getting divorced and needs to get out or they lost their job.

If you can market to those people, you will find a potential deal. When you talk with people that are in one of those situations and they do want to sell, lock down the deal and work like hell to find a buyer.

Hi Jacob! I have yet to move on my first property, so take my input with many grains of salt. I'm not sure what you mean by, "I don't really have a whole lot going for me right now." My thinking is, you can always start by educating yourself, either through the BP forums (which you're doing!), podcast, books, other networking, etc.

A short while ago, one of the guests on the BP podcast mentioned that he was so prepared for his first deal (through reading, networking, BP, etc.) that when it came time to pull the trigger, it was such a seamless process and he thought, "wow this isn't so hard after all!" Not saying this is how we all will feel when we decide to do our first deal, but the idea of being so prepared that when it comes time for action, you're 100% ready, I think is a great takeaway.

I'm of the opinion that you should start saving cash while reading everything you can on REI so that when you do have the capital, you're very clear on how you want to deploy it. Good luck!

Hi Jacob,

I am just starting out as well here in SA. I've been focusing on learning as much as I can from the podcasts and reading material put out by BP. At the same time I am trying to build up my savings to put myself in a position to purchase my first property. Good luck to you!

Education is vitally important....real estate, finances, investing, state landlord tenant codes etc.

However without a steady employment income you will not likely go very far, or if you do you will have to work 10 Xs harder to achieve success. Investing with no savings, no income and no credit is not realistic.

I would advise you concentrate on establishing a good solid employment income and living a frugal life style to save every possible penny.

There are ways to get started with out this solid base but the chances of success is extremely low. Simply view the preparatory time as part of your investment in your future. 95% of the indivulaes in your position fail because they view real estate investing as a way to go from zero to success....this is not realistic, you need cash and a solid income if you hope to increase your odds of success. Otherwise you will have less that a 5% chance.

@Jacob Aguilera Define not “a lot going for you”. I’m only a couple years older then you. Do grad school. Work full time. Invest in real estate. Also work another part time job. Very possible to do. You just have to figure out what works for you.

@Jacob Aguilera  

You need cash and savings.  I am sure you are working hard, but start working harder if you want to start from nothing.  

If you have a degree, find the best pay you can for said degree.  If not, look into jobs that pay decent in the real estate field.  Construction is hard work, but pays decent and will teach you skills you can carry over into real estate investing.  If you are not the dirt jobs type or you can't find one, try administrative jobs to learn the business side of things though they don't always pay well.  If you can't save with this job either reevaluate you spending, cut where you can and/or get a second job.

In some ways, I hate the no/low money down mentality of BP. Granted, the last 5 properties I purchased were all essentially no money down and I even walked away with a check at closing on my last property and then BRRR'ed it and walked away with another at the refi closed. What I am saying is, I don't disagree with no and low money down strategies, but I don't think BP does a good job of cautioning against the long term affect of no money down.

Buying is the easy part.  You know how much you are paying for the property and what is needed to close.  Owning is the hard part.  No inspection will tell you everything that is wrong with a unit or what may come up down the road.  No matter how air tight the lease, every landlord has been stiffed the last month's rent at least one.  I've never had a tenant trash a place, but I know its always a possibility.  I was  recently hit with replacing a roof and an HVAC in the same week.  These instances are where having no money really hurts.  

@Jacob Aguilera , I agree with some of what's been said. You can get really good at finding deals and then take on equity partners of private lenders for them. Have you been to your local REIA meetings yet? You should network with other professionals in your area. You never know who you want end up talking to. You can offer to do the leg work if they have the funds and are too busy to do that grunt work themselves. Keep learning, start to save what you can and network, network, network. There's a good saying that goes: if you find a really good deal, the money will be there for it. (I think there's truth in that!) Good luck!

If you are 22 and don’t have much going on in life with income or savings I would be fair to question your future in real estate it takes motivation a strong spirit and persistence . Real estate isn’t cheap and I’d have to ask what you have been doing since you were the working age of 16 

@Jacob Aguilera why don't you have a "whole lot going" for you right now? You need to make things happen and if you are unwilling or unable to do that, then you won't succeed. Task one is to get money, which is accomplished by working and cutting your spending. Find a good paying job, then find a second hustle and a third. You should have multiple ways to make money. Investing by definition requires money, sorry.

Okay, more specific. I'm working a summer job, so I have a little saved up. Just not enough for a down payment on a property. I've been reading, studying, and listening as much as I can, and I'm just worried I'll never get started. I'm just really tired of having to wait, I guess.

@Jacob Aguilera you've got a few options, and I think folks have outlined some of them. I'll add my advice - which you should always take with a grain of salt.

1. Get and save as much money as possible, find the cheapest duplex/triplex/SFH with as many bedrooms, and househack. This requires a decent paying job, living under your means for as long as possible, but if you can save 600-1000 a month by NOT paying rent, and possibly having people put money in your pocket, than this is good.

2. Find a liquid family member or friend and see if they'll partner with you on a deal. This requires you to bring something to table, whether it be knowledge, know-how (e.g. rehabbing), or some other benefit.

3. A few folks said go wholesale...but wholesaling to me is a job that requires boots on the ground, and cash to start to make a dent. Again, unless you know someone who wants to unload real estate at a fraction of its worth, you're going to need to get money to get boots on the ground.

Frankly, I started as a landlord because I wanted to. I bought a house when I was 24 with a FHA loan, had enough money to buy another home with my wife when I was 28, and I rented out my first home. I could do all that because I saved every penny, didn't have student loans (thank you community college and all my credits transferring to my actual college), and didn't buy crap I didn't need.

So I think without time, money, know-how, or "much going for you" -- you need to figure out what your ultimate goal is and then start working towards it. My ultimate goal is to fund enough doors to either live off my R.E. and quit my job, or be able to do both and enjoy having the money necessary to walk away from a "real job" one day and do whatever I want. So I'm saving as much as I can, educating myself, and investing in properties where the numbers make sense.

You're 22 and far ahead already even thinking of those things. Educate yourself, get a job, keep a job, save as much money, and look to reduce your expenses so you can SAVE. A FHA loan on a duplex, triplex, or SFH with multiple bedrooms can make you a landlord. But you also need systems and knowledge in order to operate the property. Start learning now, and start saving now, and when the right deal comes along, you take it.

(Side note, I had the option of buying a duplex in what was a so-so neighborhood in Philly back in 2009. I didn't do it. Now that property, if I owned it and sold it today, would have netted me probably 100k in proceeds AND have someone else renting the larger unit, paying all of my living expenses. I kick myself every day for not taking that property, and tell all potential investors the same thing. When the opportunity knocks, you take it.)

@Jacob Aguilera Hello Jacob , I am new myself and I am kind of in the same situation. Although I have income , what I’m looking to do is set a proper foundation. What I mean by that is , getting an education and making up in my mind what strategies I want to use. I’m also taking my time to find EXIT strategies , from what I’ve researched is that sometimes you may have what you think is a great deal , but it may be difficult to get it funded or even sell your deals. Also even though I’ve lived in my city for most of my life , im researching and trying to learn about opportunities in my own backyard. My first advice is maybe find a REA associations in your area ( some do require a fee, but it’s worth it) . I’m also considering joining Bp pro . There are creative ways to find No or Low money down deals , but as wel all know sometimes there is a such thing as “too good to be true “ . I say that to say right now you may not have cash or savings , but here is plenty of ways to get into real estate for instance getting a license , giving up elbow grease to a contractor , volunteering at an attorneys office and calling your local municipal office to see what the laws are . Money will never beat relationship building and gaining a proper education so your in the money right now you just have to figure out a way to put it into your account . Best of luck Tevin.
@Jacob Aguilera I would recommend making a budget right away and saving regardless of any deal. Main reason, bad things happen and you need reserves or it could really make life hard. With that saId, fInd good deals and the money will come. When you have a deal you can take the opportunity to someone and bring value compared to having nothing and bringing nothing. All the best!
@Jacob Aguilera I'm in the same boat. I dont have alot of money but I am learning and studying. The best thing to do which I'm struggling with is to have patience. There are so many things you can do before going and investing. Read, listen, learn, and connect. Something really powerful to do is talk to people who have already done what you wish to do. I just sat down this past Saturday to dinner with a local home flipper who is a millionaire. I was super nervous and it was awkward at first but after 2.5 hrs of talking we learned so much about each other. I learned so much from him. Things I thought I new he made me question. The best thing you can do is talk to people. Plus the more people you talk to the more people you will meet that would be willing to invest there money with you. Just look at the first investment as a learning experience. You will get more value out of the actual experience than you will with a check.

@Jacob Aguilera , You've gotten some good advice so far . I know you are eager to invest, but even if you did get into a deal somehow without money,  you'd want to make sure you have reserves when something happens. 

How is your credit score? I'd start building credit now if you haven't already.  Apply for a credit card and pay it off every month so you don't get charged interest. Credit Karma and Credit Sesame are two free sites to check your credit. 

Have you considered getting your real estate license? There is a cost but it is minimal under $1000. There are some brokerages that will pay for your training if you work with them after you receive your license. It's a competitive business of course but there are advantages of course of having the license and no ceiling on income. 

Having the license can also open up some salaried (non commission) type jobs like property management etc. 

Type in real estate license as a keyword in indeed job search and your city and you'll see various positions. 

@Jacob Aguilera   You need to start saving money aggressively. Also, you could consider buying a house to move into where you don't need a large down payment and renting some of the rooms (aka: house hacking). 

@Jacob Aguilera - Do you know what avenue in real estate you would like to do? What learning have you completed on your own? 

Figure out what niche you want to try and/or are interested in and find someone who is doing it at a high level and find out if they are hiring at all. If they aren't offer to do work for FREE! This will give you the opportunity to learn up close and accelerate your attainment of knowledge.

Also - don't type or think this again -  "but I don't really have a whole lot going for me right now". You are the words/thoughts you think and write. Instead you could be energized and motivated to become a kicka%@ real estate investor! Gotta have yourself in the right state to accomplish big things bud!