I Invest In Real Estate
[i]How to Get Started In Real Estate Investing With No or Not Much Money[/i]
Let me start by being honest. When I got started in real estate investing, I had good credit and had just sold my residence for a big chunk of change. So like everything in life, real estate investing is easier if you have money and good credit. But even if you are broke, there are ways to get started. Again, let me be honest. I have never done any of these, but I also know that others have. Check out the free web site biggerpockets.com.
1. [u]Find houses for investors[/u] - As we speak, I am texting back and forth with a guy named John. He knows a family that wants to sell this house quickly. He thinks I can get it for under $70,000. I believe that the house is worth around $100,000, so potentially $30,000 in equity if it works out. If I close, I will gladly pay John $1,000. Why wouldn't I? I'm still $29,000 ahead. Do a google search for "bird dogging real estate" or "driving for dollars". In my area, I can't find bargains on the MLS anymore, so there is potential for you if you can find leads for investors. When I was broke, $1,000 looked pretty good to me.
Here is the house:
[image deleted]
2. [u]"House Hacking"[/u] - I assume you are paying rent or a mortgage. If you have to move, buy a duplex, preferably one that needs a lot of repairs. Get a rehab loan (if you are living in the unit you may have more financing options than an investor) and rehab the duplex. *Then* live in one unit yourself and rent out the other unit. Every situation is different, but a lot of people get started by living rent-free, because their tenant covers the mortgage payment on the duplex.
Another idea is to buy a beat up house, get a rehab loan to fix it up. Move in and live in it for two years (per IRS regs). Sell the house without having to pay capital gains. Repeat.
3. [u]Learn about Hard Money loans.[/u] ***Hard money lenders do not care about your credit*** They loan money at very high rates, i.e. 5 points, 14% interest, but may finance the entire purchase and rehab of an investment property. If you find a house for $50,000 that needs $10,000 in repairs and will be worth $100,000 when rehabbed, someone will lend you the money. But you have to follow through and do it, or they will foreclose.
4. [u]Find a partner.[/u] By searching for local real estate investment groups, you may find an investor willing to work with you. Some investors got started by offering a percentage of the profit on their first house to an investor who put up some cash or simply offered expertise that they did not have.
5. [u]Don't forget credit cards.[/u] Be careful here, but I am currently rehabbing a house and have charged most of it to one credit card that is 0%. In December, the rate jumps to 14%, but even if I don't pay off the card before then, the interest I will pay for a little while is nothing compared to the equity I will gain in the house.
As I said, the best way to get started is to take a windfall of cash and invest wisely. But if you are broke their are still ways that you can get in the game. Even in the wealthiest markets there are people who:
--Overspend and don't keep up with repairs on their house so that they can't sell to a retail buyer
--Go through a divorce
--Get a great job offer and have to move
--Are facing foreclosure and need to sell fast
--Have inherited a house that they don't want to deal with and just want cash
Find those people for yourself or find them and refer them to grateful investors who will show their appreciation with cold, hard cash!
Let me start by being honest. When I got started in real estate investing, I had good credit and had just sold my residence for a big chunk of change. So like everything in life, real estate investing is easier if you have money and good credit. But even if you are broke, there are ways to get started. Again, let me be honest. I have never done any of these, but I also know that others have. Check out the free web site biggerpockets.com.
1. [u]Find houses for investors[/u] - As we speak, I am texting back and forth with a guy named John. He knows a family that wants to sell this house quickly. He thinks I can get it for under $70,000. I believe that the house is worth around $100,000, so potentially $30,000 in equity if it works out. If I close, I will gladly pay John $1,000. Why wouldn't I? I'm still $29,000 ahead. Do a google search for "bird dogging real estate" or "driving for dollars". In my area, I can't find bargains on the MLS anymore, so there is potential for you if you can find leads for investors. When I was broke, $1,000 looked pretty good to me.
Here is the house:
[image deleted]
2. [u]"House Hacking"[/u] - I assume you are paying rent or a mortgage. If you have to move, buy a duplex, preferably one that needs a lot of repairs. Get a rehab loan (if you are living in the unit you may have more financing options than an investor) and rehab the duplex. *Then* live in one unit yourself and rent out the other unit. Every situation is different, but a lot of people get started by living rent-free, because their tenant covers the mortgage payment on the duplex.
Another idea is to buy a beat up house, get a rehab loan to fix it up. Move in and live in it for two years (per IRS regs). Sell the house without having to pay capital gains. Repeat.
3. [u]Learn about Hard Money loans.[/u] ***Hard money lenders do not care about your credit*** They loan money at very high rates, i.e. 5 points, 14% interest, but may finance the entire purchase and rehab of an investment property. If you find a house for $50,000 that needs $10,000 in repairs and will be worth $100,000 when rehabbed, someone will lend you the money. But you have to follow through and do it, or they will foreclose.
4. [u]Find a partner.[/u] By searching for local real estate investment groups, you may find an investor willing to work with you. Some investors got started by offering a percentage of the profit on their first house to an investor who put up some cash or simply offered expertise that they did not have.
5. [u]Don't forget credit cards.[/u] Be careful here, but I am currently rehabbing a house and have charged most of it to one credit card that is 0%. In December, the rate jumps to 14%, but even if I don't pay off the card before then, the interest I will pay for a little while is nothing compared to the equity I will gain in the house.
As I said, the best way to get started is to take a windfall of cash and invest wisely. But if you are broke their are still ways that you can get in the game. Even in the wealthiest markets there are people who:
--Overspend and don't keep up with repairs on their house so that they can't sell to a retail buyer
--Go through a divorce
--Get a great job offer and have to move
--Are facing foreclosure and need to sell fast
--Have inherited a house that they don't want to deal with and just want cash
Find those people for yourself or find them and refer them to grateful investors who will show their appreciation with cold, hard cash!
56-60, M