What to do when you have 0 money!?!

Buying & Selling Real Estate
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What to do when you have 0 money!?!

Dillon Lopez
Realtor · San Jose, CA · Member since 2019 · 23 posts · 12 votes

See my first post for more about my goals! But...Simply put, what would/have you do or done if you were starting out with what you're currently doing now with NOTHING! Could you do it, what would you need to do what youre doing now and how would you do it!?

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y

16 years ago (ugh Im getting old) I was $100k in the hole after finishing school, having credit card debt, a car loan and crappy credit. Im in a much better position now. This was my path. 

1) Learn to attack my debt

2) Became obsessive with personal finance. (I lived in a $400 a month studio in a basement in the ghetto, then when I moved to DC my rent was $500 living w 3 roommates)

3) Focused on growing my career. Most people overlook this. I made $30k out of college. Every 4 years or so Ive about doubled that, and while Im not doubling anymore, Im still focused on growing it a good percentage. NownIm focused on 25-30% growth. (Doubling my income now is much harder at the higher incomes)

4) Picked up a side job (real estate agent used to be my part time job)

5) As my debt shrank, learned to invest in stocks and save.

6) Savings exploded once my debt was gone

7) Kept living frugally and funneling all my new savings (and my earnings continued to grow too) into investing 

8) Then finally started investing in real estate.

9) When I built my rental portfolio enough, then became a full time investor and agent. (Honestly I should have done this sooner, but I was scared of not having a paycheck every 2 weeks)

Real estate investing shouldnt nessecarily be step 1. Learning to save, growing your income so you can save, learning to invest all should come before real estate. 

[email protected]301-893-4635Podcast Guest on Show #192
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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    7y

    @Dillon Lopez i would save as much money as I could. While saving I would do my best to network learn the business. Especially learn how to evaluate deals and to learn the local market. That way when i do see a deal I am mentally prepared to do it.

    10Reply
  • Dillon Lopez
    OP
    Realtor · San Jose, CA · Member since 2019 · 23 posts · 12 votes
    7y

    @Ned Carey thanks for reply and input! Exactly what my mindset is, thanks for the affirmation. I’m alone at this point as in amongst my friends and family- none have pursued real estate ( which is good , and am eager to be their resource ). Appreciate and taking your input to heart.

    Kind regards,

    Dillon Lopez

    0Reply
  • Kevin Wang
    Real Estate Agent · Plano, TX · Member since 2013 · 106 posts · 54 votes
    7y
    Get money! Jk . Its a slow process but you can make money in virtually any industry. As long as you provide a service or product and someone is willing to pay for it. Then you will have money. It's difficult starting out with nothing. Initially you'll be grinding for the money unless you have a good friend or relative. I'd start learning as much as I can, asking questions to reduce mistakes because mistakes cost money. Real estate is a construction business so I probably start there. See how houses are built -Kevin
    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    16 years ago (ugh Im getting old) I was $100k in the hole after finishing school, having credit card debt, a car loan and crappy credit. Im in a much better position now. This was my path. 

    1) Learn to attack my debt

    2) Became obsessive with personal finance. (I lived in a $400 a month studio in a basement in the ghetto, then when I moved to DC my rent was $500 living w 3 roommates)

    3) Focused on growing my career. Most people overlook this. I made $30k out of college. Every 4 years or so Ive about doubled that, and while Im not doubling anymore, Im still focused on growing it a good percentage. NownIm focused on 25-30% growth. (Doubling my income now is much harder at the higher incomes)

    4) Picked up a side job (real estate agent used to be my part time job)

    5) As my debt shrank, learned to invest in stocks and save.

    6) Savings exploded once my debt was gone

    7) Kept living frugally and funneling all my new savings (and my earnings continued to grow too) into investing 

    8) Then finally started investing in real estate.

    9) When I built my rental portfolio enough, then became a full time investor and agent. (Honestly I should have done this sooner, but I was scared of not having a paycheck every 2 weeks)

    Real estate investing shouldnt nessecarily be step 1. Learning to save, growing your income so you can save, learning to invest all should come before real estate. 

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    37Reply
  • Terry Lao
    Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
    7y

    @Dillon Lopez

    The below link let you see the glass as either half empty of half full. 

    Which do you see?

    https://www.biggerpockets.com/forums/12/topics/511...

    Terry

    1Reply
  • Dillon Lopez
    OP
    Realtor · San Jose, CA · Member since 2019 · 23 posts · 12 votes
    7y

    @Kevin Wang thanks Kevin! Yes exactly, being vague to instigate these exact responses! But there’s a reality that in my market we need considerable capital to start. But that’s my exact plan now, is to sustain my household with my current job while creating the capital to start what I really desire throughout this year. I was listening to an older podcast from bigger pockets and simply put , our workload/project will fill the time we a lot ourselves to have. I am

    Giving myself 6 months to close on 2-3 deals and am already on track. I’m excited and already appreciating input from this community. Thanks !

    0Reply
  • Dillon Lopez
    OP
    Realtor · San Jose, CA · Member since 2019 · 23 posts · 12 votes
    7y

    @Russell Brazil I think I’m in the same boat! Attacking personal debt and setting tangible goals for these next few months. Already seeing week by week improvements. I’m excited for longer term goals being met if these little victories are already creating such satisfaction now. 6 months ago I didn’t see myself paying off 1 credit card. And now, I’m almost there by applying firm commitment. Thanks for your insight! Taking your input with great consideration. Not to sound repetitive amongst this thread but the support within and hour of just asking for help/insight is already affirming that I’m on track and not alone! Thank you!

    Kind regards,

    Dillon

    1Reply
  • Dillon Lopez
    OP
    Realtor · San Jose, CA · Member since 2019 · 23 posts · 12 votes
    7y

    @Terry Lao thanks! Good read

    0Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y

    @Dillon Lopez

    I would have got a job and saved like any sane person starting out

    0Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    7y

    @Dillon Lopez

    Read your other post. I would recommend you read a book that was almost purpose-written for you, @Scott Trench's Set for Life.

    You get that down payment on the house hack set up. But right now, you're at ground zero for high real estate prices in the Bay area. If you want to get into real estate starting from nothing, there are better places.

    So you know how to run an auto body shop, and it's also very clear you're aware that the profitability has been getting more and more squeezed out of that in recent years. But there's still some time. Can you move the shop out to somewhere else, maybe an hour away, where the real estate prices are slightly less crazy? Rent a commercial space and go at it there?

    Then dig in for a long hard grind to knock out a 3.5% down payment on a househack. It may take you a year, it may take you more, but the first step has always been and will always be frugality. BiggerPockets.com "The Money Show" will help you with all of the many details of this. Get your budget squared away. Track your money. Reduce your rent by moving into a shared roommate situation, or on a cot in the back of the shop. Figure out how to cut costs to live on less. You of all people are aware of how much money people burn on cars they don't need. Drive something small and cheap and old. Accumulate the money for the househack.

    And then take your shot. Move into your househack, move tenants in, and start paying off the loan while you keep putting aside just as much money as possible.

    If I were you, with your background, I would start learning basic carpentry, homebuilding, residential plumbing and electrical work. You're going to need to maximize your income in the years ahead. A body shop makes money, but there's a natural cap on that. An affordable handyman service makes more, property set up and marketed, and you can then take those skills and apply them to the first stages of your real estate business.

    After a year's up and the first househack is over, buy a second househack. You're well on your way.

    1Reply
  • Anastasia G.
    Lender · NJ NY PA CT GA FL, Puerto Rico · Member since 2015 · 213 posts · 111 votes
    7y

    @Dillon Lopez find an investor or real estate investment company to work for, there is more to it than money. Learn to bring value. If you are tech savvy and know how to generate leads/convert them - you are golden.

    0Reply
  • Jarred Sleeth
    Investor · Austin, TX · Member since 2014 · 144 posts · 86 votes
    7y

    @Dillon Lopez Some really great advice in this thread. I don't have a ton to add as most of the really important points seem to have been hit. However, I do believe in this business it is important to scale reasonably. Sometimes it is hard not to compare yourself to others who may have started sooner, or even started later, and have exploded businesses. Forget about them, learn what you can but focus on YOUR story. Play the long game, take care of your finances, and you're going to do well.

    5Reply
  • Frank Wong
    Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
    7y

    Dillon,

    Don't even start looking for properties right now. No money = no investment.  Why even waste your time.  #1 thing is to increase your income.  My suggestion is to go into sales.  Something where you can control your own destiny.  The harder you work the more money you make.  Not good at public speaking. Learn. Don't know how. Learn.  Everything can be taught just gotta go and do it. 

    Once you got money flowing in like everyone said start paying down debt.  Life becomes much easier when you are not handcuffed by it. Yes, you can certainly do it.  Almost every investor you will talk to starts off at zero. I started off in college waiting tables at night. Saved enough and bought my first 4plex.  

     Its all about mental focus and doing whatever it takes.  When your mind starts telling you its hard and to quit you know you are headed towards the right direction.

    3Reply
  • Dillon Lopez
    OP
    Realtor · San Jose, CA · Member since 2019 · 23 posts · 12 votes
    7y

    @Frank Wong

    Thanks for the input- currently what you mentioned are in my goals and business plan for the year. I do enjoy all the facets of sales and am lucky I can support myself now and everything else I will get done will be a huge push towards.

    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Dillon Lopez. Save money, increase income, I moved twice last year (lived in 3 different states) to increase income. Network, and pay off debt. If you have bad credit, work On fixing it. Took me 10 months of saving and probably 12 months of learning before I completed my first goal. Now I’ve done 6 deals and I’m working on numbers 7 and 8. Take time. Network. There is no secret to real estate. It takes time, money and many years (typically) to make it rich and make it big. Just the same as it is with any other type of investing

    4Reply
  • Bjorik Mutize
    Real Estate Broker · Minneapolis, MN · Member since 2016 · 530 posts · 398 votes
    7y

    @Dillon Lopez

    I’d definitely figure out a way to accelerate your savings from your day job. Cut out expenses. Even get another stream of income!

    Then while doing it continue to network to create opportunities to possibly raise equity down the line. I’m trying to learn to do this myself.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    7y

    @Dillon Lopez in my 20's all my friends were going out to the bar spending $50-100 a night and driving fast cars. On most occasions I was working on a Friday or Saturday night while they were out partying. They went to the coffee shop on break and out to lunch every day at work. I drank the free coffee and brought a peanut butter sandwich for lunch. I saved up and got into rentals, doing everything myself. Plumbing, painting, flooring, leasing, you name it. If I was turning a vacant unit, I would work until 2AM every night and get up at 6AM for my day job. Some nights by body literally was throbbing from head to toe. 

    You have to be willing to do "whatever it takes". Most people aren't. They work 8 hours, stop for dinner at a restaurant and lay around watching Netflix. Then they complain "my job is sucking the life from me". 

    6Reply
  • Bill Goodland
    Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    7y

    @Dillon Lopez I think the most important thing is to ask yourself why you have 0 money. While I’m sure some gurus will say it’s possible to go from 0 to 6 figures in a year, I believe and think most would agree that if you haven’t had the discipline to save and invest before, you probably don’t have what it takes to drop everything and become a full time real estate investor or wholesaler. Yes people can raise money without their own cash, but would you give your money to someone with no skin in the deal or significant track record? While I know you Dillon realize all of this already I say it to stress the importance to new investors that first ensuring that you’re living well below your means and prioritizing increasing the value you have in the job market is the first step towards being a successful investor. If you want money to work for you, you have to go out and make it first, and find out a way to hold onto it and make it grow. Live frugally, make money, make more money, keep living frugally, invest, get better at investing, repeat. Enjoy life.

    0Reply
  • Dillon Lopez
    OP
    Realtor · San Jose, CA · Member since 2019 · 23 posts · 12 votes
    7y

    @Bill Goodland

    Great input! Thanks! - stating 0 money not because I don’t have any. But looking to be as resourceful and seeing if experienced persons may now have the hindsight or tools that I could even apply.

    Thanks!

    0Reply
  • Arlen Chou
    Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
    7y

    @Dillon Lopez I don't know your personal status, but if I was young and single with no kids I would resolve myself to grind the next 5 years. Live like a monk, and also double my earning time.  Meaning, I would go full digital as a realtor and work mostly out of my car.  I would dress well and drive Uber/Lyft as I was working digitally as a realtor.  I would keep my eyes open to the neighborhoods that I drove and keep track of changes that I see over time.  You would be amazed to realize the changes over a year if you actually track them.  I would put business card holders on the head rests of my car and on the dash so my ride clients could take one if they needed an agent and also talk them up about my professional skills if they started a conversation.  I would also spend spare time doing retail arbitrage, buying neighborhoods that interest me so I get more real intel.  I would spool up my social media skills and start a vlog and post to Instagram about my grind, my riders and my financial climb.  

    To do all of this you really have to focus on the long grind and embrace the monk life style... But after 5 years, you will have no debt, a ton of cash, know the neighborhoods better than the cops and hopefully have a huge social following.

    3Reply
  • Mikhail Katz
    Rental Property Investor · Berkeley, CA · Member since 2018 · 30 posts · 18 votes
    7y

    @Dillon Lopez

    Make money, live humbly and save. That what i would do. We are talking about investing here and for that you need that money.

    0Reply
  • Dillon Lopez
    OP
    Realtor · San Jose, CA · Member since 2019 · 23 posts · 12 votes
    7y

    @Mikhail Katz

    Thanks for your thoughts! Also I am a huge fan of asking questions. And am hoping anyone who makes it this far down the thread is getting something of value.

    4Reply
  • Shinda M Cooper-Jackson
    Realtor · Philadelphia, PA · Member since 2018 · 2 posts · 0 votes
    7y

    @Dillon Lopez

    Good question, thank you and all who chimed in

    0Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    7y

    Wholesale deals, bird dogs, save money etc.

    0Reply
  • Danielle Smith
    Detroit , MI · Member since 2017 · 26 posts · 7 votes
    7y

    @Russell Brazil awesome

    1Reply
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