I'm POOR....but DONT want to be!

Buying & Selling Real Estate
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I'm POOR....but DONT want to be!

Zee Singleton
Rental Property Investor 路 Houston, TX 路 Member since 2011 路 69 posts 路 11 votes
Now that I have your attention...馃槈 How can I use my $5k tax refund to make money in Realestate? I've been reading up on crowdfunding. Any success stories? My ultimate goal is to buy and hold 10 properties that generates a $100k annual profit.
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Jay HinrichsBusiness Member
Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
9y

spend 700 on your real estate license course get on with a top producer team so you can start earning money doing what you want to do that is transact real estate.. this will give you a base to work from get paid to see how RE deals work.. networking is great and you may just turn into a superstar real estate sales person making big dollars..

but only do this part time and with a top producer who is paying you and feeding you their referrals a leads..

trying to invest in rentals with 5k is almost a sure fire way to go broke. you simply are under capitalized.

Podcast Guest on Show #222
JLH Capital Partners51 Review
WebsiteView Page
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  • Account Closed
    Investor 路 Scottsdale, AZ 路 Member since 2016 路 1k+ posts 路 885 votes
    9y

    Heh, heh, heh Funny lady. First, don't spend your tax refund on pizza. 

    Some of the answer depends on your income. If you have enough income to carry another rent payment (mortgage) for a couple of months, you could buy a property Subject To, find a Tenant Buyer, get a down payment from them and sell them the house. Yes, it works.

    1Reply
  • Zee Singleton
    OP
    Rental Property Investor 路 Houston, TX 路 Member since 2011 路 69 posts 路 11 votes
    9y
    @ Kin Min THANKS!
    0Reply
  • Jeff Wallenius
    Specialist 路 Indianapolis, IN 路 Member since 2014 路 670 posts 路 352 votes
    9y
    Zee Singleton $5k won't do much and your better off holding that money and working to add to it. Start making contacts, go to the real estate meet ups in your area, and dig into education. It's a process but education is key! You'll get there, just keep moving forward!
    6Reply
  • Andrew Johnson
    Real Estate Investor 路 Encinitas, CA 路 Member since 2016 路 3k+ posts 路 3k+ votes
    9y
    Zee Singleton Just remember, it's just as easy (if not easier) to lose money in real estate. I don't think $5K would cover what I'd think you need in reserves, let alone to purchase the actual property. So my recommendation: save, learn, add to the nest age. Figure out what you need for personal reserves, potential property reserves, a down payment, etc. Keep checking those off your list one by one and you'll know when you're ready. That said, if you're paying 20% on some random credit card debt of $5K, I think I'd pay that off first!
    4Reply
  • Zee Singleton
    OP
    Rental Property Investor 路 Houston, TX 路 Member since 2011 路 69 posts 路 11 votes
    9y
    CC'd Andrew Johnson thanks. No card debt just trying to get started. with little to no capital. Thanks for your tips.
    0Reply
  • Isiah Ferguson
    Investor 路 Charlotte, NC 路 Member since 2017 路 321 posts 路 157 votes
    9y

    I'm still a newbie myself but my suggestions for getting started with little too no capital. You should consider networking and creating partnerships. FIND deals that will allow you to do Owner-financing, & subject 2. Their not easy to find but when a TEAM and Marketing anything is possible. 

    2Reply
  • Steve Vaughan
    Rental Property Investor 路 East Wenatchee, WA 路 Member since 2014 路 10k+ posts 路 16k+ votes
    9y

    Glad you don't have cc's, Zee.  What about other consumer debt like cars? Student loans? Just trying to get a bigger overall picture so we can better advise you.

    Instead of crowd funding your $5k for no say, I'd get some business cards made and print up some flyers for vacants.  Drive for dollars and let everyone know you are a home problem solver. Save more on a scorched earth budget while working extra and educating yourself.  $5k is a good start.  Build on it with laser focus. Don't do what your broke friends do. They will be in the rat race their entire lives. Glad you are here!

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    9y

    spend 700 on your real estate license course get on with a top producer team so you can start earning money doing what you want to do that is transact real estate.. this will give you a base to work from get paid to see how RE deals work.. networking is great and you may just turn into a superstar real estate sales person making big dollars..

    but only do this part time and with a top producer who is paying you and feeding you their referrals a leads..

    trying to invest in rentals with 5k is almost a sure fire way to go broke. you simply are under capitalized.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    12Reply
  • John Hickey
    Rental Property Investor 路 Chappaqua, NY 路 Member since 2015 路 1k+ posts 路 947 votes
    9y
    Zee Singleton I would second Jay Hinrichs suggestion on the license. Q do you own your own home? If not and I were you I would start looking into house hacking a duplex or triplex. You need to have some goals and a plan. Not a bad idea to come here and ask what others would do but the best is to decide what you really want in 5, 10, 20, 50 years. When you have a goal you can make a plan. Read some books like greatest salesman, golden rule and think and grow rich. I started with less than you not too long ago in a high barrier to entry market. 10 years and 4 months ago I had 1,500 in the bank when I stumbled across a 3 family I really wanted for 700k. The owner was in the building when I went to see it. I made and offer and negotiated the price down to 675. After the seller accept and asked me for a contract and a down payment he laughed himself silly finding out I only had 1500. He gave me a few weeks to get the 3.5% fha would require when I did he stick with me. I was his highest offer and that's what he wanted. I cut out a picture of the house and put it on my dashboard of my old beat up paid for car. I got a second job, then another sold everything of value I had. I spent no money except essentials. I never had a drink, because that was a luxury. A little more than 6 months later slightly tipsy from a few drinks during my celebration, I was sleeping on the floor with a towel as my mattress and a coat as my blanket I can still remember closing my eyes that night hearing the steam pipes bang like a sledgehammer. I had a big smile. Looking back I can see my main advantage then was that I had little to lose and a ton of focus and energy. It helped that I was couch surfing and occasionally sleeping over at my job so expenses were very low.
    5Reply
  • Zee Singleton
    OP
    Rental Property Investor 路 Houston, TX 路 Member since 2011 路 69 posts 路 11 votes
    9y
    Isiah Ferguson You are right! Thanks for the motivation.
    1Reply
  • Zee Singleton
    OP
    Rental Property Investor 路 Houston, TX 路 Member since 2011 路 69 posts 路 11 votes
    9y
    Steve Vaughan Yes I have other debt like car, and student loans, but those bills are taken care of with regular income.
    0Reply
  • Steven Stokes
    Specialist 路 San Francisco, CA 路 Member since 2013 路 227 posts 路 158 votes
    9y

    @Zee Singleton I had a friend who recently came to me with a similar situation and I thought carefully about what I WISH I would have done in the beginning, rather than what I did in the beginning. 

    Here's the best advice I can give you, imagine your goal is you want to live in California and you live in Texas now. And now you have some extra money and you want to drive to California. You could just get in your car and start driving west and hope you hit California. You could bust out one of those old fashion map books and try to find a route to get to California. Or you could use your GPS and efficiently and accurately get to the exact address you want to go to, at the exact time you want to get there. 

    Unfortunately, most people do the first one when thinking about investing in real estate. They just do anything and hope something works. They just go West. Some read and learn everything they can and then they proceed. This increases their chances of success but it still isn't guaranteed or efficient. 

    What I would ask you to do is put pen to paper and make a plan of attack. Plan out what you're going to do? How you're going to do it? What and who you will need to get it done? And what are your goals and objectives? 

    By knowing what your goals and objectives are and having a plan to back them up will put you further than, 90% of the people on this board. IMO 

    I've been investing in real estate and businesses for 13 years and it wasn't until I really started to plan out what I wanted did I become successful. Because creating a plan shows you what you have to do next and then next, and then next. Instead of just doing whatever is in front of you. 

    So, this is the best advice I can give you. Have a goal, make an action plan to accomplish that goal and stick to it. 

    I hope this help and good luck

    Stephen

    2Reply
  • Doug Martinez
    San Francisco, CA 路 Member since 2015 路 6 posts 路 2 votes
    9y

    Grant Cardone, 10x it. Proud of you, break free from poverty. 10x it

    1Reply
  • Steve Vaughan
    Rental Property Investor 路 East Wenatchee, WA 路 Member since 2014 路 10k+ posts 路 16k+ votes
    9y
    Originally posted by @Zee Singleton:

    Steve Vaughan Yes I have other debt like car, and student loans, but those bills are taken care of with regular income.

    I doubt you'll care what I think, but the car payment will sink your dream here.  It's more than the monthly payment or the fact it drops in value like a rock while you make those payments. It's the mindset. It shows where your priorities lie. Your spirit changes when you don't have a car payment. 

    Broke and looking good will get you nowhere but best of luck.

    2Reply
  • Zee Singleton
    OP
    Rental Property Investor 路 Houston, TX 路 Member since 2011 路 69 posts 路 11 votes
    9y
    Doug Martinez This is the first I hear of Grant Cardonde. I just searched this board for info. Thanks!
    0Reply
  • Account Closed
    USA 路 Member since 2017 路 102 posts 路 62 votes
    9y
    You're already taking the first step. You're asking for advice from people who know what they're talking about. Listen to what they are saying, learn as much as you can and save as much as you can. Keep moving forward. Good luck.
    1Reply
  • Guy Gimenez
    Investor 路 Corpus Christi, TX 路 Member since 2012 路 2k+ posts 路 1k+ votes
    9y

    @Zee Singleton

    1.  I want to look like Brad Pitt. Wanting is never enough.  

    2.  Buying and holding 10 properties will take tremendous effort on your part and you won't get their with $5,000.  Put that money in an account in case you have a hiccup in your work, your car requires major repairs, etc. 

    3.  Never invest money you cannot afford to lose. Giving your money to a third party, until you've built a strong, trusting relationship, is the quickest way to lose your $5,000. 

    4.  Spend $200 to get your real estate license so you can work part-time for a broker and learn real estate contracts, contract law, negotiating, solving title issues, etc. 

    5.  Become a notary. You can earn extra money as a mobile notary on weekends and after your normal work hours. 

    6.  Spend every spare moment reading, researching and building relationships with local real estate investors.   

    Best of luck Zee. 

    @Zee Singleton

    3Reply
  • Stanley Parsley
    Investor 路 Chandler, AZ 路 Member since 2015 路 409 posts 路 214 votes
    9y

    @Zee Singleton

    go buy you a house on terms

    get it done

    youll find a deal out there for a couple k down

    you might have to talk to 20 people but there is always someone that will say yes

    enjoy

    1Reply
  • Igor Avratiner
    Investor 路 Philadelphia, PA 路 Member since 2015 路 69 posts 路 28 votes
    9y
    Just find ways to get involved that don't cost money. Go to reia groups, start talking to realtors, talk to a mortgage broker about getting pre qualified, call wholesalers from bandit signs, etc. Just start talking to as many people as possible and little by little the big picture will become clearer and clearer. Learn to ask good questions and find ways you can add value for the people you would like to learn from. Maybe even try to get a job in the industry so you can be close to it. In the meantime get good at saving money, 5k is a great start. Sit down and work up a personal budget, run your personal finances like you would run a business, this is good practice. Figure out where you can reduce your expenses, strategically pay down high interest debt, and how much you can save every paycheck. For example many real estate investors would go out and risk their money to earn a 10% return. If you have debt that you are paying 10% on it maybe wise to pay it off. I am not saying that deals haven't been done with 5k and a prayer but I think sometimes being in the right place at the right time has something to do with it. Unless you have a crystal ball you won't be able to predict the time, but you can put yourself in the right place by getting as close to the industry as possible via networking and some of the other things mentioned above. It's one of those things once you start on the path and stay on the path it's not that hard to hit your goals. It's may not be as fast as you would like but if you are consistent you can make anything happen.
    1Reply
  • Account Closed
    Investor 路 Lake Norman/Mooresville, NC 路 Member since 2015 路 16 posts 路 4 votes
    9y

    You can probably start by owning your first home, and house hacking. Sent you a request with some useful info. Good advice in this thread. That said, never tell yourself no, plenty of no's coming your way just from living. Taking the first step in asking is a great thing. Keep learning. Good luck.

    1Reply
  • Zee Singleton
    OP
    Rental Property Investor 路 Houston, TX 路 Member since 2011 路 69 posts 路 11 votes
    9y
    Vincent Nicholson thanks. I already own my own home. 1 that a lease that has a mortgage and another I live in that I own free and clear.
    0Reply
  • Account Closed
    Investor 路 Lake Norman/Mooresville, NC 路 Member since 2015 路 16 posts 路 4 votes
    9y

    I'm sorry I misunderstood, in that case, look into Getting a heloc to access your equity from the home you own and using that money to help buy you another property...maybe a mfu to speed you up to your goals. 

    0Reply
  • Lorayne McKelvy-Morris
    Residential Real Estate Broker 路 Sacramento, CA 路 Member since 2017 路 14 posts 路 6 votes
    9y
    $5,000 isn't going to get you very far in real estate, but I love your headline!
    0Reply
  • Cindy Larsen
    Rental Property Investor 路 Lakewood, WA 路 Member since 2015 路 8 posts 路 4 votes
    9y

    @Zee Singleton in my opinion, given the situation you described above, the best thing to do with your $5000 is to open a self directed Roth IRA. You can then invest in real estate, mortgage notes, or anything else you want (carefully following IRS rules about prohibited transactions). The benefit of investing this way, is that your investments are tax free, forever. If you are starting out with a small amount to invest, you can buy pieces of consumer debt through lending club and prosper. You can buy pieces of mortgage notes through real estate crowd funding sites such as peerstreet. The interest you earn is tax free. You can contribute more to your Roth each year, until you have enough to parther with someone else (or their Roth IRA) on buying a rental property.

    You can also get money into your roth by converting other retirement accounts such as 401k (paying the taxes on however much you convert each year sooner, rather than paying more later, after it has grown, when the IRS forces money out of your 401k via RMDs). If you assume a 7% return on your 401k account, that means it doubles every 10 years, so the taxes you pay later will be much more.

    Another way to get money into your Roth IRA is to create a business that you do a few hours a week (possibly real estate related as others have suggested). That business can have a retirement plan called a solo 401k, andnyou can make both before tax and after tax contributiins to it. THe great thing is that you can make after tax contributions (up to your total taxable income from that business or $55k whichever is greater) to your business's Roth 401k. Then, you can convert the funds from the Roth 401k to your self directed Roth IRA.

    After a lot of research, I picked mysolo401k.com for my selfdirected Roth IRA and solo 410k provider. Each year the amount of money I have invested in the Roth IRA is a larger part of my net worth, and it will never be taxed with either ordinary income tax, or capital gains tax. My plan is to convert money out of my 401ks into the Roth IRA, up to the top of the 28% tax bracket [conversion amount = top of bracket - my AGI]

    I pay the taxes on the conversion amount using this year's income instead of paying the taxes with part of the retirement funds, as that gets the most money into the Roth IRA. The reason the Roth IRA is so powerful is that taxes are your biggest expense (and everyone elses biggest expense too). The Roth IRA elimimates that expense, and makes whatever you invest in much more profitable. if you ever need to take money out of the Roth IRA, it is a tax free distribution. The same money withdrawn from any other retirement account, such as 401k, is taxed as ordinary income, which means, it bumps you into a higher tax bracket, and is taxed at that rate. RMDs are mandatory with everything except Roth IRA, so you end up losing up to 39% of your retirement funds with every retirement plan except Roth IRS. You never have to take it out of the Roth IRA, and you can invest it in whatever you like, and take distributions if and when you need to, on your schedule, not the IRSs schedule.

    1Reply
  • Stanley Parsley
    Investor 路 Chandler, AZ 路 Member since 2015 路 409 posts 路 214 votes
    9y

    zee

    this post is 17 days old

    0Reply
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