1 really good idea for newbies to get in the game! (Its NOT wholesaling)
For those who want to get into real estate but have little or no money this post is for you.
Essentially if you want to get into this business but don’t have money to invest you need to provide a service to make money and gain experience and knowledge. I wanted to take a second to tell everyone out there how I got started with basically no money and see what everyone thinks.
Usually the first thing on a post like this will be wholesaling. Everyone should get in to wholesaling! NO. There are to many people that want to be wholesalers. Its saturated in my opinion.
So what do you do to get started?
LEASING.
Charge 1 months rent to find tenants for landlords and property managers. - That is exactly how I got started in this industry 9 years ago. Here is how it works:
Step 1. Get landlords, investors and property managers to list there properties with you "for rent". Tell them you charge the 1st months rent as your fee and that you are non-exclusive... meaning if they rent the house before you do then your charge them nothing.
Step 2. You advertise and show the properties to prospective tenants. If you have no money then use free advertising resources like Craigslist, Postlets (zillow), rentlinx, hot pads, etc, etc...
Step 3. If the tenants like the place then you get an application and an app fee. You then process there app and turn it into the landlord. If they accept the tenant then your fee is the 1st months rent.
Rinse and repeat.
As you first get started with this you want to plan on getting your broker license asap. In my area you can do leasing for one owner or management with out a license. So once you have multiple clients you will need to be a broker. I was lucky enough that my first client was a good size PM.. so I was able to make enough money to support getting the license and growing the business.
Once you get too busy to handle it all your self you can bring on another agent. You can pay your agent 50% of the 1st months rent or possibly 35% depending on market rents in your area. Once you have multiple agents... all the sudden you have a real estate brokerage that you own.. focusing on rentals...
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I will never forget this: I was 25 years old and I met a very wealthy entrepreneur who owned and operated one of the worlds biggest sporting goods retailers (before selling out to Dicks). He asked me what I did for a living.. I said... "I own a real estate brokerage that focuses on rental properties"
He paused for a long while... He said.. "Son... that's pretty damn aggressive."
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I wanted to take a second to post this on BP because it did SOOOOOO much for my career in real estate investing. Obviously this is an extremely abbreviated synopsis on leasing and how to use it to get started, but I think this forum post could spark some interest in some noobs and get a conversation going.
When you rent hundreds of properties all over the city you real start to learn neighborhoods, demographics and the over all mentality of investing in buy and hold properties. You get to talk to hundreds of investors and property managers and learn ON THEIR DIME, while you make a steady income.
Every day on this website I see "newbies" asking what they need to do to get in on REI...
This is how I did it and It has shaped my entire career.
I would like to know what everyone thinks about my way of getting going in this great industry and what questions / comments everyone might have! Thanks!