can I buy real estate w/out money &bad credit - Posted by Like too know

Posted by Jib on January 19, 2002 at 02:45:18:

Thanks Jim.
I don’t appreciate Reed’s attitude to be honest but I only care if he is RIGHT.
By “dancing” around the DOS, so to speak, do I put myself or the seller in any POSSIBLE legal trouble?
Felonies kinda make me nervous:)
You’ve done these Jim?
I’m in FL also, is this a real option for a beginning investor in this state?
Thanks in advance for the advice.

can I buy real estate w/out money &bad credit - Posted by Like too know

Posted by Like too know on January 17, 2002 at 19:07:02:

I really want to become a real estate Investor but I have no money and bad credit can I still do it??? has anyone done it and if so how do I learn it???

No - Posted by Eddie

Posted by Eddie on January 20, 2002 at 17:52:00:


YES! YES! YES! - Posted by JohnBoy

Posted by JohnBoy on January 17, 2002 at 21:03:43:



Here are a couple of ideas that should help you get started in the right direction and answer how you can do a no money down deal with no cash, no credit, no income, no nothing, except having some general knowledge backed with a desire to succeed by going out there and taking ACTION!!!

The way most people make money in this game is by using creative techniques to solve one person’s problem while being able to structure the deal to where it makes you a profit.

The key to finding a lot of deals in this game is to look for the MOTIVATED SELLERS… forget about looking for houses, that’s a waste of time and requires way too much work!!! Narrow it down to dealing with “MOTIVATED SELLERS” and make fewer offers that result in getting more offers accepted!

Let me give you an example on buying a house for full market value, with no money out of your pocket, picking up a quick $5k up front, some positive cash flow every month, and a nice payday on the back end… plus where talking about dealing in NICE homes…NO junk properties!

Mr. Seller has a newer home he purchased about 2 years ago. When he purchased the home he put about 5% down and was able to qualify for 95% financing. After closing cost he had hardly any equity left.

Mr. Seller ended up buying a new home a couple years later. He’s been trying to sell this home before he has to close on his new home. He can’t even afford to list the home with a realtor because he doesn’t have enough equity in the property to even cover the 6% - 7% commission he would have to pay a real estate agent.

Now the Seller’s new home is finished, ready to be moved into and he needs to close on it. He closes and figures he’ll sell the old home soon, but soon enough doesn’t seem to be coming. Now the Seller is starting to have some financial problems because he has to start paying two mortgage payments until someone buys the old home. The Seller has a problem now because he can’t afford to make two mortgage payments. If something doesn’t give pretty quick, he’s going to fall behind on the payments on the old home. He’s going to pay the new homes mortgage first. But he doesn’t want to be late or get behind on the payments of the old home either. The Seller is worried about damaging his credit if he misses any payments.

This is where I would come along and be in a position to SOLVE HIS PROBLEM! I can put a stop to the Seller’s worry and stop the bleeding TODAY! All the Seller needs to do is agree to my TERMS and I’ll even pay him what he owes on the property, which is pretty close to full market value. The Seller knows he wasn’t going to get any money out of it after paying off his mortgage and closing costs, so all the Seller wants and all he NEEDS, is to get out from under his mortgage payment!

I agree to take over the Seller’s mortgage. I take it over “subject to”, which means I assume the Seller’s loan without even qualifying through the lender that holds the Seller’s mortgage. The Seller will deed the property over to me. I now OWN the home. The Seller is still on the loan that has the lien against the property. The Seller remains responsible to the lender for that loan until I pay it off! Usually within a few years when my tenant ends up exercising their option that I will give to them under a lease option agreement. I won’t be liable for the loan on the property to the lender. The Seller’s bank can’t come after me if something where to go wrong. The loan is in the Seller’s name, not mine! However, I will be liable to the Seller to perform on our contract agreement to make his payments and pay off that loan eventually, but my liability is to Seller, not his bank.

The Seller deeds the property over to me. The house is worth $150k. The Seller’s loan balance is about $145k. I agree to start making the payments in 30 - 60 days from today! Now I have 30 - 60 days to market the property before my payments start. The payments are $1400 PITI

What is the FASTEST way to sell a property? Sell on TERMS!

So I run an ad in the paper.

NICE! 4bd/2ba House
Call xxx-xxxx

The phone starts ringing off the hook!

I find a potential Buyer that has $5k to put down and says they can afford to pay $1700 per month. ($150k homes in the area would rent for $1200 - $1400 per month, so getting $1700 a month on a $1400 rental when offering an OPTION TO BUY, will bring a premium rent and people will gladly pay it, because no one else will even finance them because of one reason or another) I agree to give them an option to buy the home for $165k in one or two years. YOU get a premium on the sale price because you’re offering TERMS!

I collect the $5k up front as “Non-Refundable Option Consideration” and “IF” they exercise the OPTION, the $5k will be deducted from the purchase price of $165k, leaving my Tenant/Buyer with a balance owed of $160k. If they don’t exercise the option the option money paid is non-refundable and is lost by the Tenant/Buyer!

I get the $5k up front, plus first month’s rent of $1700. Since I was lucky and found this Tenant/Buyer in the first week, I get to keep 100% of the first two months rent since my payments won’t start for 60 days! So I collect $5k + $1700 first month rent up front, for a total of $6700. The following month I collect the full $1700 for rent and the 10 months after that I collect $300 per month positive cash flow. At the end of the year, IF the Tenant/Buyer exercises their option, they will pay $160k. After paying off the underlying mortgage of $145k remaining on the Seller’s mortgage, I’ll collect another $15k at closing.

So lets see, that’s…

$5k option money up front
$1700 first months rent
$1700 second months rent
$300 x 10 months rent = $3k
$15k at closing ($160k - $145k = $15k)

That’s $26,400.00 over 12 months total PROFIT!

Now what happens if my Tenant/Buyer doesn’t exercise the option in a year???


Now I get to start all over again! I get to collect another option fee, raise the rent after a year for inflation and get a higher selling price for the option the next time around!

I just keep repeating the process over and over again until someone eventually exercises their option!

Assuming every tenant was to exercise their option in the first year… how many deals like this would you have to do each year to make $100k???

Just FOUR deals like this one and you’re making $105,600 per year!

How many hours would that work out to be to find and structure a deal like this and get a Tenant/Buyer in the property? Not very many!

How many hours per week would you have to put into working at your job to make $105,600.00 per year???

One thing to remember is that the typical homebuyer or seller does not understand any type of creative real estate buying or selling. They typically use a realtor to buy or sell. When that realtor doesn’t sell that home or when that buyer can’t get that loan… that’s where motivation starts to set in. The Seller starts getting motivated to sell and the Buyer starts getting motivated to buy. In either case they both either, just want to get out of the property or buy to get in. The Seller will just let the property go to get their problem solved and the Buyer will gladly pay any price to just get in if you can solve their problem.

Motivated Sellers are those that have been trying to sell but haven’t been able to for one reason or another. Or they may be facing foreclosure. Or they may be in a divorce situation. Or they may have been transferred with their job and need to move on, but they don’t want to leave the house empty or deal with renting it out to renters being so far away. Or they may have lost their job and can no longer afford the home and need to find something less expensive. Or they may have purchased another home and are now stuck with two mortgage payments. Or for whatever other reasons, they just need to get out from under their mortgage payments.

The Buyers just need someone that will sell to them. They can’t get a bank loan or some just “think” they can’t get a bank loan and they only care about two things! How much down and how much per month? If they can afford the payments and have enough to put down in order to allow them an opportunity of owning a home, price doesn’t matter to them as much. They just WANT to be able to buy a home!

Your job is to become the “PROBLEM SOLVER!” Instead of thinking in terms of, I’m looking to buy properties, or I want to be an investor, or how do I buy properties with no money, or how do I get financing, etc…

Start thinking in terms of being a “problem solver”. Your job is to find SOLUTIONS to fix someone else’s problems! Your job is to sit down with these people and find out what their problem is. Once you figure out what their real problem is, you now know what they NEED! They all WANT an all cash sale. They WANT full price and WANT someone to just waltz in and buy their home the traditional way. But your job is to find out what they really NEED! Once you find out what their PROBLEM is, then you can determine what their NEED is. Once you know what they really NEED, then your job to get the deal closed is to just come up with the SOLUTION that will get them what they NEED that will SOLVE their PROBLEM!

You are not a real estate investor, you?re a PROBLEM SOLVER! You find SOLUTIONS to solve anyone’s PROBLEM! That’s how you make the deals come together!

The best way to find the Motivated Sellers is to get them to find YOU! You get them to find you by getting the word out that you buy property! Any property, any condition, any price, any time! It doesn’t matter. Just present the property to you and you will figure out a solution to solve the Seller?s problem to get them what they NEED!

You get a bunch of business cards printed up. Put them out everywhere you go. Hand them out to everyone you meet. Get flyers made up. Post them everywhere you can. Put them in Laundromats, bowling alleys, advertising boards in supermarkets, car washes, etc. Put them anywhere and everywhere you can put them! Then get some poster signs made up. Post them anywhere and everywhere you can. Telephone poles. Nail them to a stake and post them in the ground on every intersection in town. Let the world know that “YOU” buy houses for CASH! Just give you a call!!!

Eventually people will start calling YOU! Most won’t be motivated, but some will! You want the ones that are MOTIVATED! When they call YOU, that’s when you screen them over the phone first and determine their motivation. Then you go visit them and get face to face with them and build a relationship with them. You want them to get comfortable talking to you. They may want to talk about their dog for all you care. Let them! Get comfortable with them. Let them build some trust in talking with you. Whenever they talk, you SHUT UP and just LISTEN!

Listen to everything they say. The more they talk, the more information they let out. The more information they let out, the more you learn about their PROBLEM. The more you learn about their problem, the more you will be able to find out what they really NEED! Once you got that information you can now figure out a SOLUTION that will SOLVE their PROBLEM by being able to give them what they NEED! Your solution to their problem gets them what they need and you make a profit for your problem solving skills! You’re a PROBLEM SOLVER! You are the DOCTOR OF SOLUTIONS! DR. BUYER, the master of problem solving!

OK, so now you have a general idea on how this stuff can work. But HOW do you go about getting started with all this? Start by going to the top of the main page on this site. On the left side click on the link that says “Success Stories” and then READ EVERY ONE OF THEM AT LEAST THREE TIMES OVER.

Then when you have finished with that, next click on the link that says, “How to Articles” and READ EVERY ONE OF THEM AT LEAST THREE TIMES!

Then go click on the “Money Making Ideas” link and READ EVERY ONE OF THEM AT LEAST THREE TIMES!

From there, determine which type of investing most appeals to you most (Lease options, renting, flipping property, rehabs, etc) and then click on the links that offers courses for sale. Find a course that pertains to the type of investing you like most and start with that! Master that and then move on to another type of investing to expand your knowledge to enable yourself to have more tools in your toolbox to work with. That will allow you to find more solutions to close more deals!


There are SEVEN different news groups on this site.

  1. The MAIN NEWS GROUP is where you will find the most valuable information here that is posted by MANY investors that are out there DOING this stuff full time on a daily basis! This is a news group for discussing real estate investing, no money down and creative financing. You can find this news group at the following link:

  1. The Carleton Sheets Group, also known as news group II, which is where most new people end up coming when they first find this site. You will find the LEAST amount of real world knowledge on this page since most of everything is pertaining to questions like, “Does Carleton Sheets really work?” This is the news group for questions or comments or discussions infomercial personalities like Carleton Sheets and others. You can find this news group at the following link:

  1. Then there’s the PAPER AND NOTES FORUM which is the news group that pertains to making money in real estate paper, such as notes and mortgages. Here you can discuss how to make money investing in discounted cash flows and paper, including discounted mortgages and mobile home paper. You can find this news group at the following link:

  1. Then there’s the MOBILE HOMES NEWS GROUP for making money investing in mobile homes, mobile home parks and mobile home paper. You can find this news group at the following link:

  1. Then there’s the COMMERCIAL REI NEWS GROUP for commercial properties such as apartment buildings, shopping centers, office buildings, etc. You can find this news group at the following link:

  1. Then there’s the FINANCING FORUM that is the news group that pertains to financing real estate deals. You can find this news group at the following link:

  1. Then there’s the Legal Forum that is the news group that is for general questions about real estate law, including real estate contracts, legal documents, legal forms, asset protection, taxes, tax issues and business organizations. You can find this news group at the following link:


After you have done all this you should have a pretty good understanding of what’s involved. If you have a particular question on something then scroll to the top of the newsgroup that pertains to the type of property you are interested in and click on “Search the Archives” link and type in the word or words pertaining to your question. You will probably get MANY posts that have been posted in the past that will answer your questions many times over!


AFTER you have done all your research and reading up on everything, this is how you should start with the next step once you are ready to start looking for deals.

Before I get into the different ways of doing different types of deals I want to go over a few other things first. I get a lot of e-mails in addition to seeing many posts being made by people saying they need to make some fast cash in order to pay other obligations they have. Most of these people are talking about doing a L/O deal where they will be putting a Tenant/Buyer into the property and using the option money they get from their Tenant/Buyer in order to get the fast cash they are looking for. In my opinion this isn?t the smartest way to get started in this business. The first thing you need to focus on is building your cash up to give you some reserves in order to cover yourself should you end up with a deal that goes bad. You have to cover your obligations to the seller. You have to protect your Buyers. If your immediate goal is to get some fast cash to use towards other obligations, then getting involved with a deal that you are going to remain in the middle of is the wrong way to go about this. You need to focus on deals where you can get in and out of, with a quick profit where you have no further obligations or liability in the deal. Then you can use the profit you make and spend it on whatever you choose. You won?t have to worry about getting caught up in a mess that you cannot financially afford to be in.

So what type of deals can you do that will allow you to do this? Well, the answer is, pretty much any type of deal if you know how. So lets look at some of the ways you can accomplish this using different types of deals.

The most common deal that everyone hears about getting started with is flipping properties. The first thing that comes to mind when hearing the term, “flipping properties”, is doing wholesale flips, where you find a run down property, get it under contract, and flip it to another investor, leaving the other investor with the lion share of the profit and making a quick profit for yourself. The truth of the matter is, there is more ways to do flips than just looking for run down properties. You can flip just about any type of deal, whether it be a wholesale flip, a retail flip, whether it be making a cash offer, doing a L/O, or even a “subject to” deal.

This is where having the knowledge comes into play. The more knowledge you have, the more ways you will know how to structure the different types of deals and be able to make a fast profit without having to take on the risk by staying in the deal.

If you have done your research then you should already know by now that the deals to be had are from sellers that are motivated. You also know that the best way to find these motivated sellers is by making it easy for them to find you. You know that the way you make it easy for them to find you is by marketing yourself and letting the world know that you buy property.

Once you are set up with marketing yourself, this means you are going to run into many different types of sellers, with different types of properties, with different types of problems, that you are going to need to know how to structure the deal in order to make it work. Not every deal is going to work by just trying to do a L/O on it. Not every deal is going to work by being able to just get the deed by doing a “subject to” deal. Not every deal is going to be a junker, where you can do a wholesale flip. In order to take advantage of anything that comes your way, you?re going to have to know about as many ways as possible to do a deal in order to prevent from missing out on the opportunity of making a nice profit, just because you only knew about one way of doing things.

Based on my experience and knowing what I know now, if I were just starting out and I was cash poor, or had little cash to start with and I needed to make some money to pay other obligations first, these are some of the ways I would focus on putting fast cash in my pocket, without having to take on the risk of staying in the middle of a deal.

One way, would be the wholesale flip. If a ran into a property that was in need of a lot of repair I would get it under contract and flip it to another investor that was into doing rehabs. Depending on the amount of profit I was able to pencil in for myself would depend on how I would handle doing the flip with my Buyer. If I were just making a smaller profit, between $2k - $5k, I would just assign my contract over to my Buyer and be done with the deal. If I were to stand to make a larger profit on the deal, where I didn?t want my Buyer to know what I was making to prevent from losing that Buyer, I would set up a simultaneous closing and close the deal at a title company or at an attorney?s office if attorney?s were the ones that handled closings in my state, rather than title companies.

Whichever way I handle closing the deal, once it?s closed, I?m out of the deal with a quick profit in my pocket and I don?t have any further obligations or liability in the deal. I can use the profit for anything I choose without having to be concerned about something going wrong with the deal later since I?m not involved with it after that.

I might have a seller that calls with a nice property they need to get rid of. It could be a deal that might be had by getting it way below market value if it had a lot of equity in it. This may require a cash offer in order to get it tied up under contract. Once I have it under contract, I can then market it at a good price below market value in order to get a fast sale, and either assign my contract over to my Buyer, or set up a simultaneous closing between the Seller, myself and my Buyer. This is pretty much the same as flipping a wholesale property in need of a lot of repairs, only in this case, I?ll be marketing it for a retail Buyer instead of a wholesale Buyer. Just like the wholesale flip, once I close the deal with my Buyer I?m out of the deal with a fast profit in my pocket. Now I can use that profit towards anything I want without having to worry about any unforeseen circumstances that could arise since I?m no longer tied to the deal.

I might have a Seller that calls with a nice property to get rid of, but they have little to no equity. Well, we know trying to make some kind of a cash offer isn?t going to work because the Seller owes to much on it. So in order to make a deal out of this I?m going to have to be able to buy this one on some type of terms. If I can buy it with favorable terms then I can structure the deal in such a way that would allow me to use forced appreciation. I can do this by reselling the property and offering some type of terms to my Buyer. The problem is, I don’t want to have to remain in the middle of this deal because any cash I need I have to use for something else. Since I?m cash poor, and I don?t have an adequate reserve fund set aside, and I won?t be able to put any cash I get up front from this deal into a reserve fund, I?m going to have to do this deal in such a way that will allow me to get in and out of it, with no further liability on my part.

So what if I were to get this under a L/O arrangement? Usually under a L/O deal I would get a Tenant/Buyer to put into the property where I would make some up front cash from the option consideration my Tenant/Buyer pays me, plus some monthly cash flow while they lease the property from me, and some additional profit on the back end when they go to exercise their option, since their option price would be higher than my option price I have with the Seller. Since I?m going to be using any cash I get up front on this deal for other obligations I can?t afford to take any risk by staying in the middle of this deal.

What happens if my Tenant/Buyer turns out to be a deadbeat and stops paying? Or what if they lost their job and couldn?t pay? What if they refused to peacefully vacate the property and I had to hire an attorney to have them evicted? What if I got the property back and I had to go in and make $2k - $5k in repairs just to get the thing ready for another Tenant/Buyer?

Remember that I?m cash poor and I had to use any option money I got up front from the Tenant/Buyer to pay other obligations. I only made a couple hundred bucks per month while they lived in the property that they did pay on. I probably used that extra cash for other things also. So where do I get the money from to take care of this problem? I?m cash poor and I have no credit where I can borrow from anywhere. So now what? Let me tell you what. YOU?RE SCREWED!!!

OK, so how can I avoid that from ever becoming a problem? Easy! Don?t stay in the middle of the deal! Rather than getting all wrapped up in becoming greedy with wanting to risk everything just to get that extra monthly cash flow, and any back end profit, IF the Tenant/Buyer was to exercise their option, just get as much as you can up front and ASSIGN your contract over to your Tenant/Buyer. Just use that money they would normally pay you as the option consideration and take it as your assignment fee to let them just step into your position. Your Tenant/Buyer actually ends up with a much better contract because they will have more than one year to exercise their option that you would have given them under a new L/O contract with you. They will get your contract, which will be a lower monthly payment than what a new contract with you would have been. They end up with a much better deal by being able to take over your original contract you have with the Seller. ALWAYS make sure you get a signed release of liability from the Seller when you assign your contract over to someone else. That way if your Buyer should ever screw up, the Seller can?t come back to you and hold you liable for the contract.

All you need to do is continue to do deals like this until you have made enough money to take care of your other financial obligations that you needed the cash for. Once you have taken care of that you are ready to move on to the next step. The next step will be building your cash reserves. I would want a minimum of $25k in cash reserves built up before feeling safe enough to protect myself before using any of the profits from the deals I do, that I will remain involved with.

If you are already in a position to where you don?t need to make some fast cash to use towards other obligations, then you can start with this next step, which is building up your cash.

Now that you are ready to start building up your cash you can either continue to do deals, where you flip them to an end Buyer or assign your contracts over to them. You can then take the cash you make and put that away in your reserve fund until you get enough saved up before venturing into other things. Or you can jump-start your investing by doing more deals where you can take advantage of building up monthly cash flow and equity that will provide you with some nice paydays on the back end when your Buyers eventually cash you out. Your main goal here should be focussed on getting your reserve fund built up before you touch any of the up front profits you make from your Buyers down payment money or option consideration money. Put all of that into your reserve fund until you have at least $25k in reserves. If you average $5k per deal in up front cash then you will only need to do 5 deals to get your reserves up to $25k.

Once you have built up your reserves you will have the cash on hand to deal with any unforeseen problems that may arise. Basically, you will be using your Buyer?s cash to cover any expenses you incur should one of them default on their agreement. Then when you get another Buyer to put into the property again you can replace the reserves you used with the cash you get up front from them. Meanwhile you can use any of the monthly cash flows coming in for other things, like replacing your income to live off of.

Once you?ve reach your minimum goal of getting $25k in reserves you can then start using some of the up front cash you get on future deals towards other things. Even though you have some reserves built up you should continue to take some of the up front cash you get on future deals and put that away towards building cash that will allow you to do other deals you normally couldn?t do without having cash on hand to invest. As your portfolio of properties continues to grow you should add a little more towards your reserve fund to allow you enough cash to carry you over, should you ever run into a problem where you end up with a handful of vacant properties at once. If the economy or something were to take a dive you will have enough cash to carry you over until things turn around again, hopefully!

As you continue to do deals and get more experience your knowledge base will grow with it. Then you can start looking into other things if that is something you choose to do and diversify your investments.

So if I were starting out today I would start with flipping property, L/O?s and doing “subject to” deals. With having a good understanding in each of these types of avenues of real estate investing, I could have more than enough to keep me busy with doing a lot of deals. The key is to educate yourself in everything you can that pertains to these types of deals and you should be way ahead of the game if you implement a good solid plan and take action!

If you could afford to, I would buy at least 3 courses. One on flipping properties, one on doing L/O?s and one on doing “subject to” deals. If you can?t afford to get all 3 right away then pick one on L/O?s or flipping properties and start with one of those. Then take action and get out there and just do it! Get that first deal under your belt by flipping or assigning it over to another Buyer and cash out with a quick profit. Take $300 - $400 of that profit and buy the next course. Then go out and do another deal and take enough out to buy yourself the 3rd course. Then crank out the marketing and get those Motivated Sellers finding you! Then close some deals and begin building your way to financial freedom!

The important thing is to implement a good plan and stick to it until you reach your minimum goals in order to give yourself a solid foundation to where you don?t get yourself into trouble and end up living in a financial nightmare!

I can get into a lot more detail on this but it would require writing an entire course on the subject and this is already getting way to long. These are just some basic ideas to help you with finding some direction on where to start after you have done your research and educated yourself with the basics.

Now if you have to ask me any questions on this stuff, then that just tells me that you haven?t spent enough time reading through this site. Anything you could have a question on pertaining to the type of deals I?m talking about here can be found in the archives, or in the how to articles, or the money making ideas section, or even in some of the success stories here. So go back and read through everything again if you need to!

If you search the archives on the MAIN news group by typing in, “getting started” you will get close to 500 posts on the subject. You will find a ton of good information reading through them.

For those reading this that haven?t researched this site, search the archives, read the how to articles, read the money making ideas section, read the success stories, and EDUCATE yourself. Then move forward by putting together a plan of ACTION!

I hope this has been of some help to you and helps you in finding some sort of direction to getting started.

May the force be with you!


Here is another post I read here on this site in the past. It?s an excellent post that was posted by Todd (MO) about setting goals.

Posted by Todd (MO) on April 25, 2001 at 15:59:00:
In Reply to: How do you write/organize your goals??

The following are some excerpts from a training I did on goal setting and achievement. I hope you find it useful.

Setting Goals

Perhaps one of the most important things that you will do to ensure your success, is setting goals. Many people, however, fail to recognize the importance of this activity, and tend to pass it over as unimportant. But nothing could be more vital to your success than learning how to properly set goals.

As I mentioned in the secrets to success section, one element that all successful people have in common that is responsible for their success, is that they set specific goals and devised a plan for achieving them. This means that they were able to determine exactly what it is they wanted, and knew how they were going to get there.

There are 3 basic types of goals. They are:

1.)Improvement goals ? Things that we want to change or make better. Lose weight, quit smoking, have better relationships, etc.

2.)Achievement goals ? Things that we want to accomplish. Top salesperson, greatest golfer, best teacher, etc.

3.)Financial goals ? Things that we want to acquire. Making a million dollars, being financially independent, cars, homes, etc.

Ask a majority of people about their goals in these areas, and they will typically give some vague, general answer. If it?s an improvement goal, they may tell you that they want to lose weight. While they may be able to lose weight without a clearly defined goal, their chances of really succeeding long-term are slim until they specify how much weight they want to lose, and devise a plan for how they are going to do it.

If you don?t know where you?re going, how will you know when you get there?

The keys to effective goal setting are:

1.)Be specific about your goal. State exactly what you want. Instead of just saying I want a new car, state “I will have a ?98 BMW 740i, white with tan leather interior, chrome wheels.”

2.)Set a date for reaching this goal. “I will have it by May 5, 1998.”

3.)Devise a plan for reaching the goal. “Thru real estate investing, I will acquire at least 2 income-producing properties a month that will create a net cash flow of $300 per month each, and I will buy at least 1 property per month that I can fix-up and resell for a $10,000 profit.”

4.)Indicate where and with whom you will have/accomplish this goal. Who else will be involved and/or affected?

The 7 Keys to Goal Achievement

Once you have written down your goals and developed a clear idea of what you want, you still have to get there.

I have put together what I consider to be the 7 keys to achieving your goals. These are the crucial elements from start, to implementation, to achievement of your goals, that everyone must do in order to make them a reality. Again I want to emphasize how important it is to put into action the information that I am giving you here, it is vital to your success. Please don?t take it lightly.

1.)Desire ? It all starts with a dream, a desire to have or accomplish something. If you don?t want it, then why bother going after it?

2.)Belief ? In order to accomplish/acquire something, you must possess the beliefs that it is achievable and worth pursuing. That reaching this goal does not conflict with your values. That no one will be harmed or adversely affected by it. And lastly, you must possess the belief that you are capable of achieving it, and that you can learn whatever is necessary to accomplish it.

3.)Knowledge ? You need to acquire the knowledge and information that you will need to know in order to do, accomplish, or achieve whatever it is you are attempting. This means learning the “how-to” of what you are wanting to do. You will also need to read about, listen to, and/or model someone who has already done what you wish to accomplish in order to learn the mental strategies that are necessary to accomplish this goal.

4.)Opportunity ? The opportunity must exist for you to take action. Is this something that you can do now? If not, when? Are there external (or internal) factors that are getting in the way?

5.)Vision ? In order to accomplish the goal, you must have a clear idea of what it is that you want, and create a compelling internal representation in your mind that you can “see” vividly. You can also use external pictures of your goal that you review daily. The better you can visualize your goal and its achievement/accomplishment, the better your chances of getting it.

6.)Planning ? Devise a concise plan for the achievement of your goal setting long-term, short-term, as well as daily goals. Also implement the use of a dayplanner type system to help you plan your time and to “track” your progress towards its achievement.

7.)Commitment ? Stick to it, no matter what. You must be prepared to do “whatever it takes” (without hurting anyone) to accomplish your goal. Use vision and planning to create such a great picture of your goal that you fall in love with the thought of its accomplishment. Post the following statement up on your bathroom mirror and recite it to yourself every morning.

“I will not give up, no matter how many obstacles I encounter, or how much pain I endure. Because these things are nothing compared to my desire to succeed.”

Yes! but with bad credit??? - Posted by Jib

Posted by Jib on January 18, 2002 at 24:27:08:

Thanks for the informative and motivating post. I know it takes time to write these:)
I hear this motivating talk all the time and don’t know who to believe.
For example: I have awful credit right now. Awful.
I can’t get a loan if I tried (and I’ve tried). I just recently tried to purchase a great investment property
but not a lender would touch me.
I haven’t always had bad credit. Actually it’s kind of a new experience. I’m making repairs as I go but, as you know, it takes time. I will have AAA credit again “soon”, I know.
I want so much to get into some kind of Real Estate venture but I can’t borrow money. I don’t have any friends that can lend me a couple thousand dollars, nobody to co-sign for me and few other options.
As far as I know in my state, Florida, mortgages are not assumable, nevermind without a credit check.
Also, I’ve been reading up on more info that “debunks” the whole “nothing down” craze. Stating basically that nothing down is a lie, that it is close to impossible and not good practice to begin with. Now you see how I’m so confused.
So, where do I go from here?
With my bad credit, what are my best options for getting involved in Real Estate?
Do I just wait till my credit is repaired and I’ve got some excess cash to invest?
What do you suggest as a good way to jump in and actually, possibly, make some money?:slight_smile:
What courses would you recommend for those with bad credit?
Are you mentoring? Just kidding.
Thanks for taking the time to post on these boards. I’m new to this site but I will do as you say above and do some research here. Thanks in advance for a response.


Re: Yes! but with bad credit??? - Posted by JohnBoy

Posted by JohnBoy on January 18, 2002 at 01:25:29:

Credit isn’t even an issue when you know how to do this without needing to use a bank to get loans from.

The SELLER is going to be your bank. The sellers need to be MOTIVATED to sell. Your credit isn’t an issue with motivated sellers.

As far as non-assumable loans, you are correct. Most loans are not assumable these days. But who cares? We assume them any way. We just don’t inform the bank about it! We buy the property “subject to” the seller’s existing mortgage. Which means the seller just deeds over the house and we agree to just make the payments on THEIR loan!

When properly structured the banks never even know about it. There is no law that makes it illegal to assume a loan without going through the lender to get approval. If the lender was to find out about it, then it’s only a breach of the mortgage agreement which is a civil matter, not a criminal matter. The bank “could” call the loan due if they wanted to, but they are not required to call the loan due. If they call the loan due and you ignored the lender, then they would still have to go through the foreclosure process to get the property back, which takes time and money on the bank’s part. So if the payments are being made on time it’s still unlikely the bank will call the loan and foreclose. The banks are in the business of loaning money and collecting payments, not in the business of spending legal fees to foreclose and turn good paying loans into bad loans and ending up with property sitting in inventory! That’s bad business for the bank.

But even if they did start foreclosure you could pay the loan off by refinancing, getting your buyer refinanced or just selling the property out right. With the amount of time it takes to foreclose, do you think you could get the property sold before then?

Then there is the lease option. If you lease the property with an option to buy from a MOTIVATED seller, your credit isn’t an issue. Then you turn around and sublease it with an option to your tenant/buyer, getting a nice amount of option consideration up front from them, leasing the property for more than what your rent is and setting their option price at a higher price than what you got from the seller. You make a profit up front, a profit each month of the cash flow, and a profit on the back end when your tenant/buyer cashes you out.

You could flip properties. Find junkers that are in need of major repairs, offer low enough price that would allow you to flip the deal to an investor that buys junkers to fix up and resale at a profit. You don’t need credit to do this. You make CASH offers, get the deal under contract with a closing date set for 30 - 45 days, then turn around and sell your contract to the investor that will show up at closing to buy the property. You have an escape clause in your contract that allows you to back out if you couldn’t find a buyer in time.

None of these methods require having any credit or requiring you to get loans in your name. Forget what other people tell you about this not being able to be done. They don’t know HOW to do it as to why they tell you this crap. Listen to those that ARE DOING IT!

Go back and read the example I gave in the article. That didn’t involve getting a new loan or needing any credit. The key is to deal with MOTIVATED SELLERS! Motivated sellers don’t care about any of this stuff. They only care about one thing. MAKE MY PROBLEM JUST GO AWAY!

Read the article again. It tells you everything you need to do to get started with this. If you read it a few times you will pick up things you didn’t catch the previous time you read it. Follow what it tells you to do. Then decide on which method appeals to you the most (subject to deals, lease options, or flipping) then buy a course that pertains to that type of investing.

When you are ready to buy a course, check the courses available on this site. I like Bill Bronchick’s material. I also like the fact that he IS an attorney heavily involved with creative real estate. I only wish we could clone this guy so I could have someone like him in my state to use.

Read the success stories here. Most of all those involve no money down deals and most if not all were from people that came here and found this site to get started. try and tell them you can’t do no money down deals!

Here is a link to another article of mine that gives another example of a no money down deal. This example required NO credit, NO new bank loan and NO job or income. You can read at this link:

Ah! but… - Posted by Jib

Posted by Jib on January 18, 2002 at 03:04:22:

Hey JohnBoy,
Thanks for such a quick response. I did a search on your posts and find you to be very informative. I like your attitude and your writing style. Your willingness to help others is commendable.
Couple more questions though. You are rousing my interest once again!
Are any of these techniques you discuss borderline illegal? Enough to scare prospects?

On these “subject to” deals, how is the original seller protected if you default on his/her mortgage? I have the deed but they are the ones responsible ultimately. True or no?

A little personal now, but do you make your living or A living investing? You seem pretty educated on the matter but then again, I’m not one to know:)

I understand you like Bill Bronchick’s material, who else would you recommend for “flipping”? This route seems to interest me the most.

Thanks so much for any reply. I’m sure it helps many people.


P.S. What is the URL to Dave Whishnat’s site?

Re: Ah! but… - Posted by JohnBoy

Posted by JohnBoy on January 18, 2002 at 08:50:15:

There is nothing illegal with these techniques, much-less borderline illegal. There are many prospects that may be scared of selling to you like this, but those who are, for the most part, won’t be motivated enough. Whether they are motivated enough or not has no bearing on the legality of using these techniques. It’s all a numbers game. The more prospects you get the more deals you will get. Many won’t be motivated, but some will. You want the ones that are motivated.

On the subject to deals, the sellers are ultimately responsible to the lender on their loans if you defaulted. However, you are responsible to the seller if you did default. If you default on the payments then you have breached your contract with the seller. The seller could file suit against you for breach of contract. Although you could avoid personal liability if you use a separate entity such as an LLC to enter into contract with the seller using the LLC as the buyer. Then your LLC is liable to the seller and not you personally.

Look at what will happen with the seller if they don’t sell? They are motivated because they usually can no longer afford the payments, which means if they don’t do something quick they are going to lose the property any way to foreclosure. Meanwhile they are destroying their own credit for every month they fall behind on a payment and end up with a foreclosure on their credit. The worst thing that can happen to them if you defaulted, is they end up right back where they were before you came along and bailed them out. If you live up to your end of the contract then you will be maintaining the seller’s credit or rebuilding their credit if they fell behind on the payments because everything will still be reported on the seller’s credit file since the loan is still in their name.

So what are their options? Fall behind on the payments and face foreclosure by losing the home anyway, or deed the home to someone willing to step in and take the payments over, maintain and/or rebuild their credit saving them from foreclosure and having their loan eventually paid off when your buyer cashes you out? Basically the seller has nothing to lose at this point and a lot to gain by taking the risk that you will continue to pay on their loan until it gets paid off.

As far as my living, I guess you could say both until recently. I was employeed up until 1992 when I bought my own business. Since then I have purchased 5 businesses which were all purchased creatively the same way real estate is purchased creatively. The first two businesses I purchased were no money down deals and didn’t require the use of my credit. The last 3 were purchased with 100% financing, but did require the use of my credit. You can read about some of this on the commercial news group that is now in the archives on the commercial board. During that time I’ve invested in SFH’s on the side while running the businesses. I just recently got out of the business and will now be doing nothing but real estate.

Besides Bronchick’s course on flipping, check out Steve Cook’s course. I don’t have his course but I did have a chance to browse through it at last years convention right before it came out. From what I seen it looked very good. I haven’t heard a single bad remark about it. Only positive remarks.

As far as Dave Whisnat’s site, sorry, I never heard of this guy and don’t know anything about him much-less anything about a web site he has.

johnboy one more question - Posted by scott in va

Posted by scott in va on January 23, 2002 at 11:38:22:

since the loan is in the name of the original seller and the deed is in your name who gets the tax benefits and how long will someone actually let you keep a loan in their name before they want it taken care of.Thank you for your time your posts are always very well wwritten and informative

Thanks, but what is your take on this… - Posted by Jib

Posted by Jib on January 19, 2002 at 24:11:02:

My confusion comes with an education that includes info like this:

I’m sure you’ve seen the site but what is your personal response to his take on the subject?
I don’t want to do anything that can jeopardize my reputation or ethics. Your take sounds appealing but then I have to consider all points of view.
I believe your opinion on Reed’s analysis would help many here. Thanks again, so much, and in advance.

Re: johnboy one more question - Posted by JohnBoy

Posted by JohnBoy on January 23, 2002 at 15:07:25:

The person who OWNS the property gets the tax benefits even though the loan is in someone elses name.

Once you OWN the property then the seller has no control over how long you keep their loan in place, with the exception of them paying it off early themselves, which we know that ain’t gonna happen. HOWEVER, you should be trying to get their loan paid off as soon as possible. You wouldn’t want to just take advantage of it by sticking a renter in the property. You want someone that can qualify for a new loan in the near future that will buy the property so the seller’s loan can get paid off.

We don’t and can’t guarantee WHEN we will pay the loan off by, only that we will get it paid off as soon as we have a buyer qualified for a new loan, which may take a year or two. Then if that buyer falls through we have to start out with a new buyer all over again. So it could be anywhere from a year to several years before the loan is paid off depending on our buyers, but we can’t guarantee when that will be. But since we need to get a buyer financed in order for us to get PAID, we work with only those potential buyers that have a fair chance of getting financed in the near future.

The good part is, even though it may take several years before we have a buyer to cash us out, the seller’s credit is being reestablished or maintained with an excellent rating from all the timely payments being made on their loan since their lender continues to report the payment history on the borrowers credit file.

Re: Thanks, but what is your take on this… - Posted by JohnBoy

Posted by JohnBoy on January 19, 2002 at 02:52:12:

Reed is just another nay sayer. Listening to what Reed says is no different than someone listening to all their friends and relatives that say it can’t be done, you’re crazy, you need to stick with working a job that will provide a good pension for retirement, blah, blah, blah!

Reed feeds off bashing other gurus to promote the sales of his own books. Don’t pay $295 - $495 for some guru’s course, by my book for only $29.95 and get the real truth about this stuff! My book will tell you how!

You know, it’s a lot easier to tell someone the sky is falling and they believe it a lot easier than believing something they know nothing about or that will require them to take time to educate themselves on and have to put any work into! That’s why only 95% of the people that get into this business never get anywhere with it and quit before they ever really got started.

Reed has never done a L/O or a “subject to” deal" in his life! Yet he’s an authority on it!

Did you see any statistics on his site that give a number of all the loans that have been called under the due on sale clause over the past 10 years? No! That’s because banks aren’t in the business of calling loans due. They’re in the business of lending out money and collecting payments to profit on all that interest they charge.

Did you know for every dollar on a loan that is not performing limits the bank from loaning out $8 in other loans? That means if they called a loan due that was paying on time, regardless of who was paying on it and then by calling the loan due caused the payor to stop making the payments on a $100k loan, the bank ties up $800k in money they can’t loan out until they get the $100k non-performing loan cleared off their books!

If banks started calling loans due every time someone did a L/O or took over a loan subject to, it wouldn’t take long for them yo go broke at that rate! Bad loans are bad for banks, period! As long as the payments are being made on time then it is unlikely the bank would be stupid enough to call the loan due. The only time it would make sense for a bank to go through that is if they knew they could absorb the loss by calling the loan, recoup anything they could after liquidating the property and reloaning that money out at a much higher rate to where it would make sense for them to do it!

Put yourself in the banks shoes for a second. You are the bank. It’s YOUR money that was loaned out. The borrower is now having financial problems to where if they don’t do something you are going to have to foreclose on them. Foreclosing could take up to 2 years depending on the State you live in. Meanwhile you have a $100k loaned against this property where the borrower has stopped making the payments. This will cost your bank interest on another $800k plus the $100k loan that went bad for the next year or two! It’s going to cost your bank attorney fees and court costs to foreclose. The property has little to no equity. Chances are high the borrower will have trashed the property by the time your bank gets it back through foreclosure. Then when you do finally get it back you will end up throwing on the market listed with a realtor. So now you’ll have 6% commission to pay the realtor. You might get between $60k - $80k on the house just to get rid of it and clear it off your books. So after getting the $60k - $80k from selling the property, minus the 6% realtor commission, minus all the attorney fees from foreclosing which will be another $5k - $10k in costs, minus all the interest on the loan over two years, minus all the interest on the other $800k your bank was restricted from loaning out over two years…how much of a loss will your bank have taken on this thing???

So instead someone else came along and just took the borrowers payments over, brought the loan current on any payments they were behind, and later you find out about this. What do you do about it? Call the loan due and absorb the losses described above, or just let it ride as long as someone is making the payments on time every month preventing your bank from taking a loss and allowing you to continue loaning out that other $800k earning interest, which is what your bank is business for???

The banks aren’t obligated to call the loan due if they found about the transfer. They have the OPTION of calling it due. If you make the payments on time they will let it go. If you pay late then they will call the loan due.

If you go over to the main news group here and type Reed into the “search archives” you will get plenty of feed back about Reed.

So you can choose to be a follower like the majority of the people are and make excuses as to why you can’t do this, or you can follow the minority that ARE doing it and are successful with it! Stay away from the nay sayers and negative people and surround yourself with positive people and the ones that are where you want to be!

Forget about Reed. He’s like a bottom dweller feeding off all the negative people looking for reasons why you can’t do this. He makes $29.95 out of 95 of a 100. The other 5 are the doers that don’t accept excuses and only look for answers to make it work!

If I wanted to take advantage of people I would do just like Reed and run around bad mouthing all the gurus and selling books and courses at a fraction of the cost what the gurus charge, to all the nay sayers looking for excuses. I’d make a ton of money off it to, because they are far more nay sayers that will pay $30 to hear me tell them what they want to hear than there are that will buy the more expensive courses that could change their lives for the better if they were willing to work!

Re: Thanks, but what is your take on this… - Posted by Jim FL

Posted by Jim FL on January 19, 2002 at 01:08:32:

I’m not Johnboy, but what I can tell you is that Reed is NOT someone I’d listen to.
Do not sweat the Due on sale clause.
If you do things right, it is a non-issue.
In fact, I really wish someone would post how many deals Reed has done.
Frankly, I’ve done my fair share and NEVER had a problem with the DOS clause.
I’m sure I’ve done more deals that Reed will EVER do.

Take care,
Jim FL

Re: Thanks, but what is your take on this… - Posted by Barry

Posted by Barry on January 31, 2002 at 10:15:01:

Hey Johnboy,

I just wanted to say thank you so much for your time and efforts to input your sensible thoughts on this sight for us newbies. I’ve been studying this site for nearly 6 months now and still can’t seem to take in all the info ! This site is the best and so are you. I like your take no crap attitude which says to me you have a lot of confidence in what you are saying. That only comes from success I believe.

I live in the Dallas TX area and have many properties I am working on. I also am a good example of bad things happening to good people syndrome as far as cash and credit but will back you up on what you are saying. I recently purchased my first contract and am attempting to sell it to seasoned investors in my area. I found lots of investors in my citys investor club website. Now its a matter of finding the right rehabber investor. Again, only time and effort was required in putting this deal together and hopefully walk away with $1000 - $2000 for my first deal…not a killing but enough to say "hey, this really does work FOR ME.

I’ll keep in touch but just wanted to compliment you on your good intentions…keep up the great work