Good morning all. My husband and I are very new to Real Estate investing. We’ve been talking about it for years now but have never been sure how or where to start. I just found this site this morning and have been reading some of the posts by other newbies. Now, I have a few questions. First, let me start by telling you all a little about our situation. We have a Bankruptcy that was discharged Dec. 2010, a few late payments since the Bankruptcy (we know this is not good but we had some troubles), my husband works as an Auto Mechanic full-time, 12 hours a day, I am a disabled homemaker, and we don’t have much as far as savings goes (maybe $2000). We are barely making ends meet. We would like to know if it would even be possible for us to get started in Real Estate investing now or should be wait until our Bankruptcy discharge is 2 years out? If and when we can start, where do we look for help, both with financing and mentoring? We need all of the help we can get as far as finding a mentor. Neither of us knows anything about Real Estate buying or investing. I just signed up for a free webinar tonight given by Peter Conti but have now read that I can find out all of the same info. for free. Should I even attend the webinar tonight or should I not waste my time? The webinar is on Backflipping. I don’t have the money to sign up for Mr. Conti’s program, which I’ve found out is close to $1000. Thankfully, I found this website. I’m hoping that we can get the help and guidance we need from the experienced people of these forums. We look forward to learning from you and appreciate any guidance that is given. Thank you for reading my post. Have a great week!
$ better spent otherwise
While I’ve heard and met Pete Conti and got good impression of him (and know nothing negative about him or his program) I have to say (and think maybe he would too) that you’re way too thin money-wise to be spending $1000 on anybody’s seminar right now.
Some inexpensive books like Lonnie Scruggs’ Deals on Wheels (see mobile home forum) would teach you a lot about buying, fixing and reselling RE, and then some calls to one or two of the REI folk in your area would be more appropriate for your time and energy.
Well, bankruptcy cannot force you to stay away from investing in real estate. Your job will be made tough, though, but it cannot come in your way from purchasing property if you are disciplined and determined. Start making efforts to improve your credit. Try to apply for small loans with lower interest rates. Pay them off in time. Once the loan is cleared on time, your credit is bound to improve. Consequently, you will obtain bigger loans required for buying estate with less difficulty.
Find a local real estate investment group and go to the meetings. Most sucessful RE people are happy to help for free, as long as your at least trying to figure things out for yourselves.
If your going to spend money on “programs” that are sold by the “gurus”, do so with the understanding that people selling programs are salesmen, and thats not the same thing as an investor who earns their living from real estate. Even if they are claiming a sucessful track record.
Your mans mechanical background is a huge leg up over most beginners; I would exploit that advantage by looking at a buy-fix-sell model.
You gotta learn somewhere, but by no means should you go into debt to learn this stuff. I spent six figures on seminars my first year in the biz, and dont regret a bit of it, but I was doing deals to pay for it- paying $1k when you only have $2k to learn this stuff is NOT a good investment. 90% if people never use it. Besides, I dont even know what he’d teach you for that.
As stated, hit up your local REIA. There will be a lot of people there that will never buy an investment house, but that’s the nature of things. There will also be some veterans there, and we all like to talk about this stuff. Like previously stated, there are a lot of people selling things at the meetings, and there is nothing wrong with that, just go in knowing that and keep your wallet closed if they offer you a seminar for your last $2,000.
If you are struggling financially you need to go for things that will not put you in a position of making payments. This probably means wholesaling/bird dogging to start. You dont want to jump into a rehab or rental with no cash and no experience. I screwed my first one up 9 ways to Sunday, how much it cost to fix, how long it would take, I paid 22% interest on the loan, etc. Luckily I also mis judged what the house would sell for by $20k or so so still made some money…no matter how much training you get, you are still going to have to learn most of it the hard way.
The biggest difference between the seminars and reading books is talking to people doing deals and realizing this stuff actually works (and that is worth the price of admission IF you can afford it). The info is out there if you’ll just read it, though. One of the other things most new people have trouble with is realizing what people in bad situations are willing to do- like deed you their house with a ton of equity just to get out from making the payments, or sell a house for half what its worth because they are sick of landlording.
Lonnie deals are good and low dollar, but there is still a cash outlay and a risk of loss there. My suggestion is to go to your local REIA, find investors that are looking for houses, find out what they want, then go find it and sell it to them. I used to pay my gal $3k a deal for bringing them to me. That’s pretty much all wholesaling is.
OK, more detail:
Go to the local reia, look on craigs list, in the paper, bandit signs, etc. Call the people that advertise “we buy houses” and such. Make a list of what they are looking for. Generally rehabbers are looking for houses they can buy at 65% of value less the amount of repairs they will have to do.
Then you go find those- probate, drive neighborhoods, talk to banks, realtors, etc. You can even put your your own signs and throw an ad in the thrifty nickel. You are looking for motivated seller, and there are plenty of them out there.
Make an offer on the house, if it meets the criteria, call the investors and find one that wants it, add a few thousand bucks to the price and assign the contract to them for a profit. There was a kid at Atlanta REIA that did his first wholesale deal last week- he made $5k on it and was looking for more, I dont think he was older than 22 or so. I only did a few wholesale deals, but made $10k+/- on the ones I did. A lot of that will depend on your area and price range. Honestly, your mental block will be the biggest hurdle to turning big numbers.
Check ebay for the basics. Carlton Sheets is on there for like $20. Ron Legrand is who I learned from, his stuff is in there that cheap, too. All that material is dated, but still good info. You do need to understand a lot of those strategies dont work in the current market, but it will still give you an overview of creative real estate, as will reading on here. Dealmakerscafe.com had a great forum on it, I checked it out last week and it hasn’t been active in years, but the archives there and here are worth as much as any seminar.
That’s the basics- send me my $1,000 when you do your first deal.
By the way, if you do this right, the bankruptcy wont affect you at all. In fact, not being able to borrow money is probably a good thing, it’ll keep you out of trouble as you learn.
I lost my ass in 2008 from having too many houses that wouldn’t sell. I didn’t file BK, but I was definitely a poster child for one and probably should have. I dont live like I used to, but I also haven’t borrowed money from an institution since. Lessons learned hard are lessons learned well.
Thank you all so much for such informative replies. I will definitely keep educating myself and I’ve already found a few REIAs that I can check out. I am going to continue reading as much as I can each day on this site so that I can learn what I need to start investing and then keep reading so that I can keep learning. Again, thank you. I greatly appreciate it.
Here is the problem with real estate investing. It is hard work. More so when you do not have money. Granted you will be a smarter investor if you learn how to make money without bringing a lot of cash to the table. Even people who start out with a lot of cash will one day find one too many deals compared to the cash they have left.
You will need to start pounding the pavement so you can view properties for sale. Before doing so you will want to get on the phone and talk to people. If you spend any money on an education at this point, spend it on taking seasoned investors to lunch. You buy the food and they answer questions for 90 minutes. Or just use the cash pay the door charge for a local REIA. Be prepared to grab a coffee with others you meet at the REIA.
When it comes to learning, very little beats doing. Even if you can not buy, you can definitely search for what you would buy. When you find a real gem you can sell the lead on to someone who can complete the purchase. There are a few details that matter. You can learn the details closer to the time when you have a possible deal.
Do feel free to post questions on the site. Someone will likely know the answer. Check out the Success Stories if you want to hear what others have done.