No credit, No money... what do I do?

Question

Hi there, years ago I invested in real estate before the crash in 2007. I lost so much that I stayed away till now. I want to get started however my credit is not what it once was, but I'm working on it and it's getting better. At this time I have nothing saved to invest and it'll be a year or two before I'll have any kind of real money to invest. Kinda embarrassing but covid-19 did a number on me, however I'm grateful for all that has happened as I've finally realized what I've always known, and that is that Real Estate investing was and still is my passion. I understand credit and finance well, and I was in mortgages for 8 years (before 2007). However, I've read about people using sweat equity to help other investors find properties to build their portfolios, and use this to leverage themselves till they get enough to get started. So I'm leaning on the expertise of the BiggerPockets community to point me in a good direction as to how I can build something from scratch. Thanks in advance...

Pierre Baquero · Answer

@Trent Otts thanks for the book recommendations, I do read a lot and since I've started back into this field last fall I've read about 15 books on real estate so far. BRRRR is on my list to read next, and I'll take your tip to read the other two following that. Thanks I appreciate your help.

Pierre Baquero · Answer

Hi there @Ricardo R., I can't necessarily say I got burnt, but rather lost a lot. In 2007 I owned and operated a mortgage company and spent my days helping people/investors with finding and qualifying for deals. I wasn't so much in the front lines as I had realtor friends that helped my clients find the deals, I took care of the financing. I had 3 of my own investment properties, a rental in Glendale AZ, a condo in L.A., and a property that sat vacant for a while in Murrieta CA. I was lucky to sell the property in Murrieta right before the crash, but lost the other 2 and my own home when I shut down my company in 2007. I know it wasn't so much of bad decision making, but rather not enough education and simply succumbing to the market conditions at that time. I was pretty good at what I did, but unfortunately I did not have a contingency plan in place to prepare for the crash. For 13 years the financial and emotional stress caused me to keep my distance. However, thats a mistake I will not allow to stop me any further and intend to make up for lost time.

Trent Otts · Answer

Pierre, Not that I'm experienced enough to give you an answer with the confidence you deserve, but the sweat-equity you're referring to comes from hustle and knowledge according to Brandon Turner. That seems to mean finding deals, knowing the good from the bad, managing renovation, and even screening prospective tenants; you know, being the point man and handling the phone calls and oversight, basically everything but the money.  As long as you're reading, I think the natural recommendation is Investing in Real Estate with No (and Low) Money Down by the same Brandon Turner. I would add Long-Distance Real Estate Investing and Buy, Rehab, Rent, Refinance, Repeat both by David Greene. Not because I'm recommending either or both of these strategies, but because they're both well-written, they both cover how to have a good team and how to find them, and BRRRR covers all of the bases of Real Estate. Sharpen your saw while you wait and come out out swinging, I know you can kill it.-Trent Otts

Ricardo R. · Answer

@Pierre Baquero could you share the extent of your investment(s) in 2007? what happened? And how you got burnt in RE? I think that will assist most on here in pointing in the right direction?

Pierre Baquero · Answer

@AJ H.  I've been doing alot of book reading and I'll continue to grow my knowledge on BiggerPockets as well. Once I get better at analyzing deals I'll try connecting with investors. Thanks for your feedback..

Aaron W. · Answer

@Pierre Baquero I'm sorry to hear about your situation and do wish you the best of luck in the future!

Based upon what you said, you bring a lot of value and experience within the industry. This experience could be leveraged for the right type of investor partner.

Continue to educate yourself on real estate and become familiar with how to analyze deals to find the good from the bad.

Continue participating in the forums and sharing your knowledge.  Let everyone know you are in real estate.

I believe with these actions, you will be able to find deals and get back into the game.  Don't allow the lack of capital stop you from investing. Capital is one part of the puzzle. If you bring other skills and strengths to the table, you will be able to find capital partners to fill that gap.

Best of luck!