Dave Ramsey style minus the money?

Question

i just joined BP the other day. Still reading "The Ultimate Guide". It's still a little confusing and overwhelming to me.

Here are my thoughts. I have under 10k sitting in a savings. This is what I want to use to start in real estate. Now for my kicker. I have not purchased anything on credit for over 10yrs. I am leery about working with a bank, and not sure if they would want to work with me with my non-credit history. The other issues are that although I would like to join an REI club, with my job I never know how long oor when I can be "home". This also presents a problem as to doing the footwork involved in rental/flipping.

I thought initially on becoming part of a "Private Funds" team to get started then flipping a few and from there renting. I dont know if with my limited funds if this would be the route to go, or if there are other options I should look into? Any educational information I can look into? Is there anyone with similar circumstances?

Richard C. · Answer

Oh, he!! no.

Don't recommend that the man put the asset with which he earns his living on the line to get in with a private lender to fund a rental. That's simply irresponsible.

Brian,  don't be so sure you cannot work with a bank.  Do you own a home, or rent?  Do you have utility bills?  Chances are, you have a credit profile whether you know it or not.

Get copies of your credit reports from the big three agencies.  Find out how you stand there.

Joshua Springer · Answer

Start by getting something to play the podcasts in your truck.  It's going to be overwhelming at times but hey you can always rewind and listen again :)

Before you do anything else I would start working on building your credit/finding out what it is.  Get a few credit cards, use them every month with very low balances (lines of credit).  Pay them off every month.  Find a credit union, take out a CD secured loan or savings secured loan so you can build a installment loan trade line.

Go to annualcreditreport.com  (1 free report per year per bureau) and get a credit report from all 3 bureaus.  Make sure all the information is correct and if anything is still reprorting.

Credit will be your best friend if you don't have enough cash to finance a deal on your own.

I'd do this ASAP so you can build credit while you're learning the rei world.

Tim Bishop · Answer

I think getting a well priced rental property or two on a 15 year note would really help your retirement (take younger and inexperienced people's advice about retirement w/ a grain of salt), but you'll have to fit it into your schedule somehow.  10k is 20 percent on a sub 50k property so that's a limiting factor, if your worried about credit, get that figured out first if you want to buy and hold.  Podcast 37 with Aaron Mazzrillo had some nice tips for self managing without having to be at the property anytime something happens.  You could probably listen to all 100 hours of bp podcasts in about a week since you drive a truck, you should listen to @Dawn Anastasi 's podcast also, she gave lots of info about lower priced properties and she also talked about lending club which could be a way to get an acceptable rate on a signature loan for a lower priced cash property if you combine it with your 10k... still need credit for that.

If you don't think you can make anything happen, you can't.  Dave Ramsey's strategy on investment properties will have you buying a crack house with a squatter in the inner city unless you can save significantly more.  His investment strategy will absolutely work, I just can't see it working for you until you have a lot more cash.  I like Dave Ramsey's budgeting advice though, my wife and I use the envelope system in a way.  We have a separate points cc's for all of our budget categories and we pay it off every month.... Dave would hate that lol.  You need a combo of cash, leverage and equity capture to make it happen IMO.

Brian Hoff · Answer

It's not so much as not trusting banks or credit unions. I just don't want to be tied down to them. I am real comfortable now because I don't "have" to work, other than paying for food. At the same time I am not comfortable with how my retirement funds look. So I have to make a change.

Richard C. · Answer

You might also look into joining a credit union, if you don't like banks.

Dawn Anastasi · Answer

If there is anything confusing, please post about it.  I'm sure someone can help you out.

Regarding the bank, what do you have distrust in banks about?  If you have your money in a savings account, you can certainly be a lender, but you want to make sure you have a good emergency fund for yourself first.

Justin Owens · Answer

Do you own your own big rig? If so...

Maybe look at using it as collateral for a private lender to  help fund your first property.

Or maybe look at selling the big rig and buying a local delivery box truck. You'd then have a vehicle that you could still make money with doing local deliveries and use for your real estate ventures.

Brian P. · Answer

OK you have a nice first name and you spell it right. So because of that I"m going to suggest you pretend you don't have that money right now and start reading and reading and reading this site and find a niche that appeals to you.  If you just want to invest the 10k there are plenty of investors willing to borrow it at a rate much higher then the banks are giving. But I"m thinking of you finding something you can learn that can be done into your retirement. It almost sounds like your a trucker, if that is true then that's great, your cab can become your classroom. Start your engine and open your mind.

Dave Ramsey style minus the money?

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