No cash to start investing

Member since 2018 · 22 posts · 3 votes

I’ve been wanting to begin my real estate investment journey for a long time. Ive read some & purchased studied a couple of program but funding is the problem. What stategies are available to me if I dont have any cash at all?

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Alexander FelicePro Member

Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes

cash helps tremendously, but really it's generally not a cash problem as much as a knowledge/talent problem

If you had 100k dropped in your lap, would you know what to do with it to make a good investment? unlikely (not to say you might not find a way to spend it). My point is that if you spend time learning, and networking you'll start to understand this business and your strategy will develop. Once you know what you're talking about, what you want to accomplish, and know people who are in the business, finding money becomes pretty easy.

if you only had a money problem, then you could just find a deal and pitch to someone with cash and have no trouble closing. Money is in abundance, talent and deals are scarce.

educate and network, both are free and they make funding much easier to get. In the meantime, save every single penny you can, this shows you're willing to make the same sacrifice that you'll be asking many others to make with you. aka skin in the game

[email protected]Podcast Guest on Show #301

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Patrick I.
St Cloud, MN · Member since 2017 · 80 posts · 29 votes
7y
@Kenyetta Overton I am no expert in real estate investing but I doubt that there is a way to invest in real estate without any money. Even wholesale which does not require buying a physical property may require some money (please don't quote me on this). Try looking to start with house hacking, rural loans (for property in rural areas). Still, those will require something. Good Luck
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Account Closed
Investor · New York City, NY · Member since 2017 · 173 posts · 36 votes
7y
Good question, and very fair, Yes it is possible without cash, I have not pursued those avenues since I had cash in bank in the beginning.
The real question is why do you want to get involved with real estate, whats your goal.
Also, which city are we talking about
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Alexander FelicePro Member
Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
7y
cash helps tremendously, but really it's generally not a cash problem as much as a knowledge/talent problem
If you had 100k dropped in your lap, would you know what to do with it to make a good investment? unlikely (not to say you might not find a way to spend it). My point is that if you spend time learning, and networking you'll start to understand this business and your strategy will develop. Once you know what you're talking about, what you want to accomplish, and know people who are in the business, finding money becomes pretty easy.
if you only had a money problem, then you could just find a deal and pitch to someone with cash and have no trouble closing. Money is in abundance, talent and deals are scarce.
educate and network, both are free and they make funding much easier to get. In the meantime, save every single penny you can, this shows you're willing to make the same sacrifice that you'll be asking many others to make with you. aka skin in the game
[email protected]Podcast Guest on Show #301
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Kenyetta Overton
OP
Member since 2018 · 22 posts · 3 votes
7y
@Patrick I. Thanks for your reply. What is house hacking & rural loans?
0 Reply
Kenyetta Overton
OP
Member since 2018 · 22 posts · 3 votes
7y
@Anthony Gjolaj thanks for your reply. I want to get into real estate to build some financial security. Decades ago, I’ve purchased personal properties using Carlton Sheets training & studied Marko Rubel, but haven’t been able to move from homeownership to investing bc of lack of resources. I understand that there’s OPM out the but I have no real idea how to find it.
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Kenyetta Overton
OP
Member since 2018 · 22 posts · 3 votes
7y
@Anthony Gjolaj by the way, I’m in the philadelphia pa area.
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Sam Shueh
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
7y
You need money to have honey. Everyone's in awhile rich uncle Bob may appear with some cash to help a badly needed niece.

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Kenyetta Overton
OP
Member since 2018 · 22 posts · 3 votes
7y
@Alexander Felice thanks for your reply. To a certain extent I would know what to do if 100k was dropped in my lap & I have studied some but need to do more. Although I continue to seek resources nearby, Networking is seemingly a challenge for me bc I don’t drive & r.e. Meet ups in my area are weekdays after work hours in places not conveniently accessible by public transportation. I really just don’t want to waste any more money on programs like Marko Rubel et al when those funds can be saved & used for actually investing.
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Kenyetta Overton
OP
Member since 2018 · 22 posts · 3 votes
7y
@Sam Shueh thanks for your reply. Unfortunately, there’s no rich anyone in my family, not even in the distance. It is solely up to me to get this work done.
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Kenyetta Overton
OP
Member since 2018 · 22 posts · 3 votes
7y
Does anyone know of an investment group or meetup in philadelphia, pa? I can get to center city, university city, old city, northern liberties, art museum & graduate hospital areas; as well as some parts of west & south philadelphia & city line avenue.
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Account Closed
Investor · New York City, NY · Member since 2017 · 173 posts · 36 votes
7y
https://www.meetup.com/Philadelphia-Real-Estate-In...
this is a good place to start
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Kenyetta Overton
OP
Member since 2018 · 22 posts · 3 votes
7y
@Anthony Gjolaj thanks
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Kenyetta Overton
OP
Member since 2018 · 22 posts · 3 votes
7y
@Anthony Gjolaj again thanks. I checked out the invitation but like most of the meetups I found that are “in philadelphia “ are actually somewhere else. This one is in in cherry hill nj. I’ll go through the site more thoroughly. There must be something directly in Philly.
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Paul AmegatcherPro Member
Rental Property Investor · Brookville, OH · Member since 2016 · 488 posts · 363 votes
7y
Based on some of the questions you are asking I would say you need to start with real estate education. There is a ton of information on this website and plenty of books on how to get started. Here is a path I would recommend for you.
1. Educate and consume everything real estate. Podcasts and audiobooks work great for long commutes.
2. Start saving 10% of your current income so you can have some money to invest.
3. Network with other investors. Join a local REIA or meetup group.
4. Locate an area that you plan on investing(farm area) in and start studying the market. Know what renovated properties in the area sell for so that when you see something listed for 50% of the market value you will know there is a possible deal to be had.
5. Start driving in your farm and area and writing down addresses for vacant or dilapidated buildings. This is called driving for dollars. You can create a list of people to market to for off market deals.
Education is the cheapest thing to acquire in real estate but most people tend to skip over it. Good luck.
9 Reply
Lana Lee
Philadelphia, PA · Member since 2017 · 364 posts · 109 votes
7y
If you own a home and have some equity in it you can take out a HELOC to use for down payment. Find inexpensive duplex and try to purchase using FHA program. But, you would need a stable job, so the lander could approve your loan. Having a good 700+ credit is beneficial. Rent out your personal residency and move into one of the units, rent out the other. But before starting all that talk to a lander, to find out what is your debt to income ratio, run the numbers, do research on the areas.
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Kerryanne Henry
Union, NJ · Member since 2016 · 49 posts · 29 votes
7y
@Kenyetta Overton you must read @Brandon Turner book on investing with no money, it gives very practical advice about funding types and financing. Super helpful and informative. Ive used it to learn how to fund deals, the advise is not only relevant but he gives practical scenarios that are relatable.
The strategies available really depend on your specific situation... available credit, partnerships, risk tolerance, local resources etc. I think it helps to know most of the available methods, then decide what combination of those work best for you. I hope this is helpful, best of wishes on your journey.
3 Reply
Dennis M.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
7y
Well It takes money and the more the better. Donot believe this nonsense of zero money down . In order to be an investor you must have money to invest ! The days of getting into a property with no skin in the game are over . Even if somebody gave you a house you’d still need reserves for cap ex holding costs and closing fees
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Joe Barton
Rental Property Investor · Mundelein, IL · Member since 2018 · 6 posts · 8 votes
7y
It doesn't cost money to drive for dollars, use the BP calculators, look at MLS listings, talk to realtors and hard money lenders.
Go to BiggerPockets.com/hardmoneylenders to find lenders in your area that will finance based on the deal and not the person
Use the BP calculators to find a good deal and bring it to them. This will do a few things
1. Help you understand the numbers and feel more confident
2. Help you look more professional when presenting your deal
There are also people on BP and elsewhere that have money they want to invest but don’t have the deals. Find a good deal and bring it to them
Hussle and attitude will bring you farther than money and no action
I also suggest listening to BP podcast #276... it’s fantastic
There are also other podcasts that discuss just getting started and no money down.
Brandon Turners book on no and low money down is a great resource also
Hope this helps... good luck!
Jb
7 Reply
Kevin Jones
Flipper/Rehabber · Florida/NC · Member since 2018 · 10 posts · 4 votes
7y
@Alexander Felice Man this is Gold 🏆! Blessings to you!
2 Reply
Dominique Pereira
Member since 2018 · 4 posts · 2 votes
7y
Hey @Kenyetta Overton I'm from the Philadelphia area and live in Austin now. I've had the opportunity to purchase properties in both places with a buy and hold strategy. A few things that I would encourage you to do is not look for just meetup groups in Philadelphia, Cherry Hill is right over the bridge and you will find people doing deals all over the vicinity. Because of the lack of cash, you might find some small deals in the outskirts of the city either way. My recommendations would be the following
1) Get with someone who is a whole seller and start presenting deals to them to split the commission. This might involve a lot of phone calls to find deals but it will show their processes and even give you insight into investor groups. Hopefully, this lasts a few months before you can do it on your own and begin getting more of the commission.
2) Look at your options for a HELOC although you don't have to submit for a formal application yet. Understanding how much money you might have access to will be important especially in some parts of Philly where some homes are under 50K
3) I think the most important thing is finding investor groups and having some potential deals that you need them to finance 100%. Money is only a tool for leverage but so is Time and Knowledge. There are plenty of people that have the money but don't have time and/or knowledge to find the good deals, so you have to leverage the two assets that you have to get access to the one you need.
I don't think they will allow me to add a link to this post but Forbs have a recent article with 10 companies with offering 0 to very low 3% down payment some with no PMI on a property. That means on an 80K property you might only need an investor to help with the closing costs, some of which you can wrap into the mortgage anyway. If you began with the wholesaling of had enough equity in your current property you might not need an investor at all. Hope it helps and I look forward to running into each other on some Philly deals.
https://www.forbes.com/sites/amydobson/2018/07/10/12-low-downpayment-mortgages-including-some-with-low-or-no-mortgage-insurance/#2078aa6469d5
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Account Closed
Real Estate Broker · Charlotte, NC · Member since 2018 · 5 posts · 5 votes
7y
Hi Kenyetta,
The problem you face is a pretty consistent one across real estate investors. While there technically are ways to begin investing in real estate with absolutely no money, I think it would be more helpful to first assess your financial situation to determine why there is no money to invest. While real estate can be one of the best wealth-building tools, things can also go terrible wrong. Just for arguments sake say the bank gave you a 100% LTV loan on a duplex. If things went south (tenants move out, repairs, etc) you would want to make sure you at least had some cash reserves to be able to avoid foreclosure on the property. My advice would be to spend a few years putting away as much money as possible, then start investing. It will be much safer and more profitable in the long run.
2 Reply
Junior Soares
Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
7y
@Kenyetta Overton Good afternoon Kenyetta, Theres plenty of money out there to raise that's for sure. They key here for you will be experience I think it's best if you grind even harder than you are now to obtain your first rental property. You can use hard money lenders, HELOC if you own your home, you can pull a loan from your vehicle if its paid off, etc. Once you have that experience under your belt raising money for your next deal will be a breeze because now you have experience and investors like to give money to those who know what to do with it and that can grow it for them. Best of luck to you, I'm sure you'll do well! Junior
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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
7y
@Kenyetta Overton tighten up and save some money! You at least need some reserves and a few thousand to get started.
[email protected]512-888-9122
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Jay L.
Flipper/Rehabber · Atlanta, GA · Member since 2016 · 47 posts · 18 votes
7y
@Kenyetta Overton I’m with the guy who said it starts with education. You began by saying you’ve studied a bunch and checked out a bunch of programs, yet you haven’t at least come across any literature related to investing with little or no money (not that all these books are created equal) and you didn’t know what house hacking was? It just sounds like to me that you haven’t been putting your money and attention in the right places when it comes to educating yourself. Someone else already mentioned Brandon Turner’s guide; so that’s a good start. To me, the sign of good information is that it’ll leave you wanting to know more about specific things you’ve read. If you learn 10 things then you’ll end up wanting to maybe look into 4 of those even deeper, which will open you up to more education...and down the rabbit hole of infl you go. Don’t bother with any book, program, website or person that claims to be a one-stop shop with all the answers. Oh and guard your credit with your life! If you’re starting with little to no cash then having good credit will go a long way in getting certain types of financing. I started out with barely $5000 and all it took was a conversation with a lender to tell me where I needed to be in order to get the funding I needed, and I worked towards that. Don’t make getting over the first hurdle seem tougher than it really is! That’s the biggest way people psyche themselves out before they ever start. Best wishes to you!
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Ramsin Jacob
Realtor · San Jose, CA · Member since 2018 · 184 posts · 71 votes
7y
@Kenyetta Overton Much to what @Alexander Felice & @Junior Soares mentioned, knowledge is power. There are many ways to fund deals. The example @Alexander Felice used was perfect with person A who has $100k sitting around to invest but no knowledge whatsoever, Person B who has no cash but all the knowledge, experience, game plan AND a deal ready. Person A is going to get no where. Person A is PRAYING for someone like Person B to come around. Of course it's always good to have cash to bring to the table, BUT, don't let that hold you back from learning, networking and being creative with the ways you fund a deal. There's no right or wrong. If it makes sense internally for the parties involved, that's all that matters. Nobody externally can say right or wrong. The only way to find OPM is by jumping in the pool. You have to get out there and get your hands dirty. Lots of time should be spent on learning the industry. Learning your markets. Understanding of all aspects involved. The more information you can attain, the better off you will be. There is a lot more money out there than there are deals. Im in the Bay Area where we have experienced a crazy growth in prices within the last decade. There are many people out here with cash ready to close deals, problem is the deals are hard to come by. That's why if you can attain the knowledge and get the deals, the cash will follow closely behind. Good luck.
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