How to find financing

Question

Jon Holdman · Answer

Number one choice: Spend less than you make and save the extra. You may think I'm being flip. I'm not. This is the number one way people accumulate money to invest, whether it's investing in real estate, stocks or bank CDs. If I could only give one rule for financial success, "spend less than you make" is it.

What are you wanting to do? Buy rentals? Wholesaling? Fix and flipping?

What are you wanting to do?  Buy rentals?  Wholesaling?  Fix and flipping?

Jon Holdman · Answer

Emmanuel Dufort, please don't type in all caps.  That's SHOUTING!  We can hear you just fine :-).

Going to that seminar is fine.  You probably will actually learn something.  You will at least meet some folks in your area and having contacts is always good.  Exchange business cards and reach out to them in the future.

But leave the checkbook and credit cards at home.  Don't sign up for any programs and don't write a check for $1000 for a home study course, no matter how many freebies they throw in.

Fix and flipping and Rentals are two very different businesses.  Fix and flipping is a job.  If you do it and are good at it, you can make some money.  You can also lose significant amounts of money.  But if you do a deal and lose $15,000 you will likely learn more than if you give some guru $15,000.

Rentals as investments.  The property management is a bit of a job, but nothing like fix and flipping.

For either of these, you need money.  Realistically, your own money that you have saved from your "day job".  To accumulate more money for investment of rolling into a rehabbing business, look at your life.  What expenses can you cut?  Cable? Car payment?  Eating out?  What can you do to earn more money?  Upgrade your skills and get a better paying job?  Get a second job?

But be very wary of gurus who try to convince you "only a sucker would work at a J.O.B. - just over broke.  A smart guy would sign up for my wholesaling program and be sailing the Caribbean with a hot babe this time next year."  Wholesaling is often pitched as a way to quick and easy riches.  (Much tougher to make a case that either fix and flipping or rentals will get you quick and easy riches.)  In reality wholesaling is a difficult, commissioned sales J.O.B.  Maybe it will work for you.  Maybe not.  But you buying the program and signing up for mentoring works quite well for the guru.

Paul Timmins · Answer

Emmanuel

Go to every free training you can bring your notebook not you wallet.

Have a business card to hand out collect conversations with everyone there.

Find some people with experience in what you want to do. Work with them at this stage your time and effort is all the payment you need to provide.

Remember at the seminar if there is only 4 seats left or the pricing is only available today it will  still be available weeks later.

I am a fan of the show also. I have known the star for years he is brilliant. Learn everything you can from the show.

Read the free beginners guide from BP twice before you attend.

Check out Scott's books on sale at BP I purchased them they are excellent.

If you truly want what they offer, hold off find 5 people who buy follow up with them for several weeks see if you can trade your labor for access to the materials.

Finally locate and attend 3 different local REIA club meeting continue your quest to find resources, people and info.

Paul

Jon H. · Answer

Emmauel,
My wife and I are about to embark on this very subject. We are about to take a year long class in our town with a local pro. He advises you network at local investors meetings etc. You will likely meet several hard money lenders or people with money to lend. You let them know casually what you are doing. In our case we discuss the class. We discuss how the deal will be structured and that we will take care of all the leg work. Here is a sample proposal:
1. We put the home we intend to purchase in the investors name. We buy these homes with 40-50% equity. We handle the whole buying process and title. We put the title in the investors name to guarentee them collateral on there investment.
2. We structure payments for repairs/improvements. Once a stage is completed we email pictures of the progress to the investor and we request the next installment.
3. Once the work is finished we market the home and sell for a profit. 
4. Once sold we give the Investor his money back plus the Percentage agreed upon when we borrowered the money in the 1st place.
Many Private money lenders are out their waiting to lend money to qualified investors. However they expect the person they lend money to to be educated, efficient and have a plan. 
By dicussing what you are doing while you network you usually can get the lenders interest in what you are doing and most of the time they will ask you how they can get involved. 
Thats when you let them know you are always looking for investors and you tell them about your structured process and assure them that you will handle everything. You make it easy for them and they will want to continue to do business with you. 
Since its your first one i would meet as many folks as possible and get their emails. Continue to make a contact list. Find a wholesale property and pay cash. Then email it to your ever growing list of investors. Do that a few times to help you gain the funds for your first deal. Then pay cash and get private money for the repairs. That way the lender will be more inclined b/c you have skin in the game and if you fail they get the property and the potential profit.

Mike Hurney · Answer

Emmanuel Dufort Seminar should be fun, Dave and Peter are characters!

Emmanuel Dufort · Answer

First, I want to apologize for typing in all capes, didn't know it meant shouting. Second, I want to think every one that gave me some feed back.  With all you guys feed back, it's giving me more confidence to go deeper in this industry. #truly thank you

Sharon Tzib · Answer

One of BP's contributors, Ben Leybovich, has a new ebook out, "20 Ways to Buy an Investment Property with $2000 dollars or less." Here's his site:

http://justaskbenwhy.com/

You may not even have $2K but it gives you some very good ideas.  Good luck!

Ruslan Laranjo · Answer

Jon Holdman That's a great post! I went to one of those seminars and i thought it was crazy to spend that much money when it can be learned elsewhere. Would it be better to save about 20,000 and use it as a downpayment to get more money? From your post, although i agree that using my money would be better, after doing the math isn't it better to buy the performance of a 200k property with only 20k of my own money? I may have missed some common knowledge that you did not touch, but you made a great post and i just wanted to ask.

-Ruslan

April Adams · Answer

Im new to wholesaling. But I was a Realtor a few yrs back and an owner/manager for some time. What is your real estate experience? Are you buying to fix&flip or to hold? I have learned alot by attending my local REIA's. But, they are plentiful here in Los Angeles. I suggest you go to your 'dashboard' and use the key word feature and type in the city your closest to. So when ever someone on BP mentions that city you'll be notified. You can just follow them all then thin them out as time passes. Also, I used the key word 'hml' (hard money lender) & I get gobs of notification emails. As you start reading more & more posts your key words will change and you'll start to get a feel for the business. I don't suggest you spend any $$ on a mentor. Oh, also consider partnering with a top producing realtor. Try to attend their board meetings as hml's often give presentations for their loans programs.

Emmanuel Dufort · Answer

Aaron Yates THINK FOR YOUR ADVICE ALSO. I WAS PLANING ON GOING TO A SEMINAR ON THE 17TH WITH THE FLIP THIS HOUSE BOSTON FROM THE AE TV SHOW. I'M STILL GOING TO ATTEND BUT I'M GOING TO BE MORE AWARE OF WHAT THERE OFFERING

How to find financing

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