Pay off CC debt first OR get busy in REI now??? - Posted by Sheridan

Posted by Buck on July 21, 2002 at 20:34:14:

If you are an artist, real estate will likely keep you from marketing your work in one of the artist’s favorite places… Starving Artist’s Sales.

Actually, no matter what you do, work for the man, self employed, or artist/writer. You will be putting in more hours for less pay in the beginning. Only, in real estate, when you get started, you will get over that hump more quickly than any other venture I know of.

Keep plugging.


Pay off CC debt first OR get busy in REI now??? - Posted by Sheridan

Posted by Sheridan on July 20, 2002 at 09:38:09:

Is there anyone out there who REALLY has done REI with no downpayment?

The reason I’m asking is a relative who is very intelligent (but not into REI) told me he listens to a lot of talk radio with Bruce Willians (“Housewise”) and others talking about these deals. These talk radio guys supposedly have said that no money down deals are pretty rare, and a few years ago when it was a “new” concept it was easier to get these deals but now sellers have wised up with Carleton Sheets and his clones out there trying this.

My relative said these gurus on talk radio said first you must be totally debt free. (The reason I want to start REI is so I can BECOME totally debt free.) My debts aren’t huge compared to other people’s. I’ve probably got $10,000 in student loans, $3,500 in credit cards, and a vehicle loan with just 4 more payments to go. That’s it. And student loan payments won’t kick in until 6 months after I graduate, which will be about 3-4 more semesters.

It wouldn’t take too long to pay off $3,500 in credit cards, however my credit rating would not suddenly become stellar. I’ve been late with payments a lot, so that’s sitting there. I haven’t been late recently and I’m working on being consistent, but the late payments in the past might haunt me. And I would be taking care of living expenses at the same time which means there isn’t really extra money to toss at the credit card payments right now.

I’m about to start a part-time job while I’m in school, working on campus. Don’t lenders want to give loans to people who have been working for a while? For the last 2 years I have not been working – just full-time school.

And I’m starting a homebased business that I hope will really take off and help pay my living expenses so I will need less student loans. Hopefully this biz will give me some cash to work with so I can have a bit of a downpayment to start doing REI, or work on paying off the credit card debt if I go that route and believe the relative’s theory.

Sounds to me like my relative is thinking in terms of the “traditional” way to buy real estate rather than the more creative ways. He’s telling me the creative ways don’t work that often because sellers are wise to the late night tv infomercials. And he said, “Why would anyone accept your offer with no money down? They want money in their pockets.”

Should I back off and start smaller, like with mobile homes, and build up some cash from doing a few of these types of deals and THEN start working my way into flipping houses, acquiring rentals, and offering lease/options to people? There are several mobile home parks in the area. One is nice, two are mediocre, 3 or 4 are really trashy, and there are a lot of brand new mobile home dealers in the area and lots of people putting them on land. Would be great to start a nice little mobile home community in the area and keep it looking nice rather than letting it fall to pieces.

Re: Pay off CC debt first OR get busy in REI now - Posted by Buck

Posted by Buck on July 21, 2002 at 11:04:09:


Nice to meet you. I am not the experienced voice in here, but I have and am studying REI. Will soon be knocking on doors looking for buyers and sellers hopefully this week. I have looked at single family, multifamily, and mobile homes for years.

If you already know mobile homes and the mh market, that might be a good place to start. But if you are learning anyway, compare the stratagies you see and choose one. Find a winning method and stick to it.

I am trying to decide which i like better, Lease sandwich or Subject to. Either of which will fit your budget (and mine).

Get started NOW! Look at some of the results of the investers on this site. in 1 to 3 years some of these investors are making more in a month than my income has ever been in one year.

Isn’t that why you are going to school? Make a better living for yourself?

Go do it!


Get busy now! - Posted by Damon Stewart

Posted by Damon Stewart on July 21, 2002 at 09:24:55:

I’ll try to attempt to answer your question about paying of c.c. debt vs RE investing w/my own experience. I started out with around 4K in CC debt. When I had 4K in cash, I used it to pay closing costs for a flip. Then I used the profits from the flip to buy 5 MH’s which cash flow around 1K per month. Then I used that cash flow to pay off my CC’s. And I felt a little guilty for paying them off quickly instead of buying more MH’s. If there’s one thing I’ve learned it’s that the intelligent use of debt can an investor’s biggest asset and it can make more sense to invest in cash flow generating assets than to pay off all your liabilities and have a zero net worth.
Best of luck to you,

Re: - Posted by Carey_PA

Posted by Carey_PA on July 21, 2002 at 24:55:05:


I don’t know if this will help you or not but I started with mobile home deals and a small line of credit. I didn’t really have too much cash, just small monthly payments from a couple mobile homes and a heck of a lot of DEBT! (student loans, credit cards, etc.)

Anyway, I wanted to move onto bigger and better things so I started looking at single family homes. I found a great deal on a home…it needed less than $3k worth of work and I made an offer of 50% of FMV. This home was a bank repo that has been on the market forever and my offer was accepted! I was introduced to a banker and I gave him all of my financials (which were horrible by the way.)

I had NO job, zero money in the bank, and I was in debt up to my eyeballs, BUT the banker gave me the loan for that property! (He saw that 50% equity and I think that that big cushion made him feel a little bit better about giving me the loan.)

Ohhh and one more thing Sheridan, that deal I just told you about…it was a REAL no money down deal. Actually, I had no money to put down so I had to do a no money down deal! My banker lent me all of the money for the purchase of the home and the repairs plus extra money to pay the loan while I was making the repairs and getting the home ready to get someone in there. (I walked away from settlement with a check for over $1k)

It can be done…you just have to believe it can be done and DO IT!

Good luck,


Re: Pay off CC debt first? - Posted by Al-So Cal

Posted by Al-So Cal on July 21, 2002 at 24:18:32:

When I started turning properties years ago nobody
was doing it I ever heard of. My first deal friends
and my old boss said it couldnt be done. NEVER LISTEN TO SMALL MINDS. USUALLY THEY HAVE NO IMAGINATION AND GENERATE NEGATIVISM. And never ask advice on a deal or for someones input
that hasnt done it successfully. Be aware of market timing and where you are in the economic cycle. If its a SELLERS MARKET like in my area youre nuts
to be going for NO DOWN and LEASE OPTIONS. Its hot and sellers are KING? Save all the CREATIVE stuff
for a Buyers market when people have to get out-sell! Or youre selling rain coats in summer. You can do
it but boy is it hard.
Get a partner-use some cash and go after it and for
gosh sakes don`t cripple yourself by discussing your
plans with non-believers and dunberheads.
Go for it!

Re: No money down,alive and well in 2002 - Posted by Dan-FL

Posted by Dan-FL on July 20, 2002 at 16:53:55:

I just did 3 deals in he last two months.They were all no money down and I even got money back at closing on two of them ( $2500 and $4000 ) Like H.R. says no money down,does not mean the seller gets no money,It means no funds come out of your pocket.It has been years since I put any of my own money in a deal.Knowledge is power,learn and you will earn if you do something with your new knowledge.

Re: Pay off debt first OR get busy in REI now??? - Posted by GL(ON)

Posted by GL(ON) on July 20, 2002 at 11:54:07:

I did my first nothing down deal in 1972, before I ever read a real estate book or took a course, and 10 years before the big “nothing down” boom of the 80’s.

I know of nothing down deals done before this, in the 1950’s and even as far back as the 1820’s.

Ask your friend if you went to the bank and got a mortgage for 80% of the value of the property and paid the rest in cash, would that be all right? What about a 90% mortgage? A 95% mortgage? A 100% mortgage? You won’t get one of those, but some people do, that have very high incomes and platinum credit ratings.

What if you had a partner who put up the down payment, would that be all right? What if you traded your car for a down payment, or other valuables?

In your case mobile homes might be a good way to start. One thing about RE investing, you can set your own hours. Unlike a regular business, if you have to lay off for 3 weeks to study for exams it won’t hurt the business a bit.

Your relative is wrong… - Posted by Hal Roark

Posted by Hal Roark on July 20, 2002 at 11:09:46:


You ask very intelligent questions. You are doing your due diligence on this field. Good for you. You are trying to cut thru the hype of rei. Good for you.

Keep it up, and get involved in rei, and it will be good for you.

Your relative is wrong. Here’s why.

80% of folks with homes for sale won’t sell in non-traditional ways. They are a waste of your time and intentions.

20% of folks in each market, roughly, can’t sell, and want to sell, and will get creative to just sell. Those are the folks you want to find and talk to.

And you know what: they don’t give a rat’s behind about any rei guru. They could care less about any specialized technique or another. They just care about one thing: unloading their headache. And if you’re the guy that has a solution that can work for them and work for you, you’re gonna own/control that house.

The second misconception of your relative is also common: no money down doesn’t mean sellers fail to get money at closing; sellers do get money. They just don’t get your money/savings. There’s a big difference.

I recommend you continue your study. Look for posts by Johnboy in the archives; he has given great advice in the past on getting started. Follow it.

I wish I had started at your age. Rei is the real deal. Nobody can tell you what to do, though. You have to determine what is most profitable in your market, and what interests you most.

Good luck,


“U-Haul” Money. - Posted by $Cash$

Posted by $Cash$ on July 20, 2002 at 10:53:44:


Glad to meet you.

I will address the area of real estate investing that I am mainly involved with. Sub2’s.

Normally the house sellers I deal with have a problem; divorce, just want out, transferred, heavily in debt, etc.

I could buy these houses with no money down, but I don’t.

I try to find out what will really help the house seller. Normally it is money. Do not misunderstand me I want the house, but we need a win/win situation for everyone involved before I make the purchase.

Generally these houses are purchased for what I call “U-Haul” money. Sometimes that is all it takes for these people to start over with a lesson learned.

If you follow the posts on this board and search the “archives”, it would seem that something would “lite your fire” that fits your pesonality and goals.


Isn’t that what you’re going to school for? - Posted by Sheridan

Posted by Sheridan on July 21, 2002 at 17:41:25:

“Isn’t that what you’re going to school for?”

Actually I am going to college for the personal fulfillment of finally finishing my degree after many starts and stops throughout the years and being sidetracked by ex-husband. My studies are creative and not the sort of field that would bring in big money. But that’s ok – I’m hoping that REI could be the perfect vehicle for me to earn money to pay the bills (and then some) leaving my time free for my creative pursuits.

Sounds like people get a little obsessed with REI deals. Maybe I won’t have time for my art once I learn a little more and get going with this. Of course my art would be a great way to relax after doing these great REI deals. :slight_smile:

THanks for all of the great posts on this topic!