Done a lot of reading, got some $, ready to start - Posted by Doug

Posted by Monique on February 19, 2001 at 13:56:16:


Since you do have money, you’ll be tempted to spend it.

Follow Phil’s advice very, very closely … PRETEND YOU DON’T HAVE IT. Rehabs take money, though you could probably use OPM with hard money lenders. And, rehabs are the toughest part of this business.

Start off with Lease/Options and Subject To deals. While you are looking for these kinds of deals, you can flip some of the great deals you stumble across but don’t want to do yourself (not in your target neighborhood, house too small, arrearage too large, etc.)

One area where you can spend your money wisely is in marketing. Marketing to get sellers to call you, so that you don’t spend your time calling them. Not alot of money either … newspaper ad, flyers, business cards, street signs, postcards.

Here’s to your success!

Done a lot of reading, got some $, ready to start - Posted by Doug

Posted by Doug on February 19, 2001 at 09:40:44:

But, realistically how much is enough? $1000? $5000? $10000?

I live in central Virginia (Richmond). I have a tax refund coming in a week or less of about $3,700. I have a bonus coming at the end of the month which will probably be around $5,000 - 10,000. I have a decent salary (low 100’s), but we live pretty much paycheck to paycheck due to mortgage, car payments and home equity loan. My wife is a stay-at-home mom ready to contribute time and effort.

I’m in the IT field and I’ve worked, indirectly, in the mortgage business for ten years. I currently work for a major title insurance holding company, have a brother that’s a surveyor and a good friend that’s an appraiser (yeah, I know, it’s staring me right in the face, what’s taken me so long?).

I have the CS program, read several books and hundreds of messages here and elsewhere.

I’ve seen some properties around $100K, one that’s vacant with an out of state owner. Most of the single family homes in our area are going in this price range. Haven’t seen any duplexes and have stayed away from townhouses and condos.

I would like to hear your recommendations of the best plan of attack… rentals, flipping, notes, etc. I am ready to take action! Give me your best shot!

Let’s be clear . . . - Posted by JoeKaiser

Posted by JoeKaiser on February 19, 2001 at 16:01:38:

Real estate is an investment vehicle for the vast majority of real estate investors, and that’s fine. I occassionally hang onto the better properties we purchase and sometimes even bury a few bucks in the process.

You probably don’t need an “investment vehicle” at the moment . . . you need to make some money first. How’s it done? Not by taking good money (real dollars) and turning it into equity (dollars buried into real estate investments).

Forget about spending money to make money. Put the dough in your pocket as a rainy day fund, and go out and put a deal or two together using nothing but your brain. That’s how deals get done and you get paid.

A few years ago I sold all my tools, and yes, I had a bunch. When you have tools in the garage, you’re often tempted to jump into a repair job to save the hassle of farming the thing out. Heck, I’d even run out to a new purchase with my weedeater in tow just to get the thing done before my ad was due to come out that weekend. Dumb.

At some point you begin to understand that it’s really not the money in your pocket or the tools in your garage that matter. It turns out that it’s really just your ability to get those things figured out and handled that determines whether or not you succeed.

So, forget about the dough. Instead, decide now that instead of taking the easy way out, you’ll do whatever it takes to figure out how to make things happen without cash, credit, (or tools). You do that and you’ll be in business.

Like Monique and Phil suggest, your money is better spent in other places, like education and marketing.

Here’s how it really works when you’ve got things set up. Got a call last week from a real estate agent who’d been contacted by an old childhood friend. She’d inherited a local property but she herself now lives out of state. He didn’t want to deal with it because of the earlier relationship, so he passed it onto us (he knows we can buy quickly, with cash).

A couple phone calls gets a deed prepared (I used to do that), gets the purchase financed (I used to do that), gets the house prehabbed (I used to do that), gets the landscaping cleaned up (I used to do that), and gets the realtor lined up to market it (I used to do that - not the agent thing, the marketing thing).


House will be on the market in a month or so, but I’m already on to the next one (and was able to pull $25k out of this property instantly . . . but that’s another story). Now, I’m not naive enough to think my job is finished. I know there will be lots of things I have to do before this thing gets sold and we get paid (but I guarentee it’s not even 5% of the time and trouble I used to put into this sort of thing). See why it beats the heck out of swingin a hammer for months on end to get a rehab finished where just breaking even is like my biggest goal in life?

Spend your time figuring things out instead of working on the darn properties. Decide on a gameplan that lets you make use of your most valuable asset, that eight pound lump on the top of your neck, and get that thing hard wired with all the necessary elements in place. You do that and all of a sudden doing a half dozen properties or more every month is a real possiblity, as is putting a few bucks into your pocket.

Forget rentals, forget notes. Get down to the basics and go pound pavement. Get your name and phone number into the hands of people who are “hot to go” (motivated sellers) and good things will happen.


Re: Done a lot of reading - Posted by Bob Taylor

Posted by Bob Taylor on February 19, 2001 at 12:47:49:


Iwas near where you are a couple of years ago. A very good friend of mine suggested I buy Ron Legrand’s “3 Mod” courses. Cost is now about $1200.00. Best money I ever spent. I think the courses are for sale on this site. If they are not, go to

There will be some people that say they(the 3 mods) are over priced. My question to them is-“Do you want to succeed fast or slow?” His, in my opinion, is the very best for someone in your position. He will not let you spend more than a few hundred dollars. YOU DON’T have to.

Good luck, and, good buying/selling,
Bob Taylor

Re: Done a lot of reading, got some $, - Posted by phil fernandez

Posted by phil fernandez on February 19, 2001 at 10:09:00:


It sounds like you have some good contacts and some background experience. How much money do you need to start. Maybe $1,000. That’s about all most of us had when we started.

You have much more than that with your tax refund and the bonus. Often I see beginner investors take that chunck of money and plunk it down on a rental house. Not good. Now all of that money is tied up.

I would try to not use any of that money. make believe you don’t even have it. If you do use the money, spread it out over several deals.

What type of deals could you do without using your money. You could do lease/options where your option money comes from your tenant/buyer. You could do “subject to” deals where you are just taking over the motivated seller’s mortgage with no money out of your pocket. Maybe you could buy a note at a good discount using a line of credit. Again no money out of pocket. Mobile home deals are low priced deals where not much money would be needed.

Good luck. The longer you are on this board, the more you learn and realize that you don’t need much if any money to craft deals.

The longest Joe Kaiser post ever. - Posted by Nate Tyler

Posted by Nate Tyler on February 20, 2001 at 22:12:58:

Switch coffee brands, Joe? Must be some good stuff.

Thanks for the reminder.


Re: Let’s be clear . . . - Posted by ScottS

Posted by ScottS on February 20, 2001 at 01:32:16:


Excellent advise, I just hope he catches on faster then I did.

Also, trying to monkey see monkey do with you often makes that 8 pound lump of mine ache, LOL.

Thanks for all you share.


GREAT POST!! I only only hope to… - Posted by David Alexander

Posted by David Alexander on February 19, 2001 at 17:47:36:

GET IT, as clearly as you do one day.

David Alexander

Re: Let’s be clear . . . - Posted by Doug

Posted by Doug on February 19, 2001 at 17:33:22:

Thanks for taking the time and effort to post a thoughtful response.

So, I think (see I’m already using my 8 pounder) that you’re suggesting flipping is the only way to go and that I should pay somebody else to work on the details like deed prep, minor fix-ups, etc. But, I’m not clear on the financing part. Regarding financing, you say you “used to do that.” Who finds the financing for you now? A mortgage broker? Or, do you only do lease/option and subject to deals?

Thanks again!

Re: Let’s be clear . . .Another Keeper Post - Posted by TD

Posted by TD on February 19, 2001 at 17:30:13:

Another Keeper Post - someone, somewhere should archive this one PERMANENTLY.

Nice One Joe - Posted by phil fernandez

Posted by phil fernandez on February 19, 2001 at 17:27:45:

Wow. Nice one Joe.

Man does that guy get right to the point.

Thanks for all your help.

Re: Brain Calluses - Posted by Stacy (AZ)

Posted by Stacy (AZ) on February 19, 2001 at 16:47:25:

Work that brain. Nice post!


Excellent post! - Posted by Eric C

Posted by Eric C on February 19, 2001 at 16:17:53:

Everyone -

I’ve always believed this game is won or lost with what you have between your ears; not with what you have in your wallet.

So listen up.

Joe’s posted a mini course right here. As the CNBC ads say, “profit from it”.

Great post, Joe. (as usual)


Eric C

Re: Done a lot of reading, got some $, - Posted by Doug

Posted by Doug on February 19, 2001 at 11:53:56:

Thanks for the reply and good advice. We’ve been pondering that question for some time – that is, since we have money, are we better off using some in a more traditional financing scenario? I can hear the answer already… why use your own money when you can use OPM!

Since I do have money, should I focus more on rehabing and flipping?

Also, while I’m at it, should I go ahead and set up an LLC for renting and an S corp for flipping or wait until I have a deal?

Re: Let’s be clear . . . - Posted by JoeKaiser

Posted by JoeKaiser on February 23, 2001 at 10:18:41:

It’s tough early on because you’re starting with a blank slate. But, there are people who’d give their left arm to be starting with a blank slate, so it ain’t all bad.

Over the years we’ve developed relationships with people who are in the various real estate related businesses who we enjoy working with and who value our business. Included is a handful of private lenders who will fund our next purchase based solely on our recommendation that it’s a “good deal.”

So, while there will be all kinds of deals with all kinds of terms, having a cash source who can and will fund quickly as just another tool in your toolbox (okay, so I still have a few).


Re: Done a lot of reading, got some $, - Posted by phil fernandez

Posted by phil fernandez on February 19, 2001 at 14:15:18:


I would agree with Monique. Rehabs are the toughest deals when it comes to tying up your money and the uncertainty is a bummer sometimes to. You think the rehab will cost you $15,000 and it ends up being $23,000. Been there and messed up there. There are easier ways as Monique mentioned. Why not lease options and subject to’s. You aren’t tying up your money.

Back to your question of setting up entities. You usually set up LLC’s for long term rentals and a corp for your flips. You can set these entities up quick so you probably don’t have to do this until you’re close to a deal. Then again why not set them up now so you will have them in place. It’s your call.