Re: I AM READY! 3 Years of corporate is enough! - Posted by Kent Cheatham
Posted by Kent Cheatham on November 14, 2001 at 14:42:48:
Keep the job for now, it will keep your credit numbers better, enabling you to borrow money. Once you have a couple houses, a banker is more apt to trust your ability to understand financing and realty.
Here is one way to make $10k/mo tax free http://www.real-estate-online.com/ss-166.html
I borrowed 100% of this from my 401k but could have borrowed it from a bank just as easily. But to make money THIS way, you need to borrow it from somewhere.
Skip the partnership. Keep the friends. I have a friend who does this too. He and I confide in and give each other tips and resources. We keep our ventures and funds separate. Sometimes he is active, sometimes me but we are not beholden to do “equal” amounts of work this way.
You need NO credit to open a business “contractors” account at Lowes, Home Depot or Ace. They just want a sig and a biz name. They open revolving charge accounts and give 10-20% off. Pay it when you can after they send bill at months end.
Buy some books and courses. Talk to many. Spend no more than $1000 on this (preferably $500). Use the rest of your money BUYING and DOING. If you havent figured it out by $500-$1000, than its not the education thats the problem…its procrastination. You do need a mentor of some kind, whether paid for or friend. If you find an area “flipper” he may educate you to have you as another client.
Once you have a list of trusted contractors, buyers and sellers and bankers you are ready to quit. This could be done in 4 months time. These 4 lists are critical and time consuming to research.
Talk to your lenders and get their feel for you doing this without a “day” job. After you have enough money to bank roll a house and its repairs, you dont care about bankers. They will ALWAYS refinance a finished house at 80%. This gives cash back to you. Now either sell it to get the other 20% equity (and incur taxes)or rent it (remember borrowed money pays no taxes). Either way you have your cash out to do the next house.
Of course if you flip, you need no cash.