Real estate investing is like a college road trip. There are so many twists and turns and there’s no telling where you’ll end; but that’s the beauty of it all right?Well the actual beauty of this trip is that, unlike a college road trip where you SPEND bookoos of cash on gas and snacks, your on a road trip to MAKE bookoos of cash.These are different ways that anyone from the rich to the poor can start making money investing in real estate and I’ve put links to almost all the categories if your looking for more information on a certain topic. Enjoy the ride and it can get bumpy.No money?Having no money in real estate investing is tough; especially when you hear every body saying “NO MONEY DOWN” and “BUY A HOME TODAY WITHOUT USING YOUR MONEY”. It’s not impossible but it is a lot harder.Being Bird dog is the EASIEST way to make money in real estate by far. It involves networking with investors in your area or you could do virtual bird dogging if you want.All you have to do is find the right properties for the right investors and they handle the rest. All the paper work, dealing with sellers and buyer; stuff like that. If any deal you bring them makes it to closing, you should have a check waiting for you; and all you did was bring them an address.
PROS: Less paper work, work for yourself and make own hours, no money is required and you get to work closely with a REI who’s living the life so pick their brain as much as you can. Its almost like getting paid to be mentored.
CONS: REI is a numbers game. The more leads you do, the more money you make. Simple as that. Many bird dogs give up after submitting a few properties and miss out on a true education in REI.
You can always market someone else’s properties but I would confirm with them first so everyone is on the same page. If you get lucky, you can get a finders fee for finding a buyer and most wholesalers will split the deal down the middle with you.MOST <== Not All. This can be done by focusing on building your buyers list which should be a top priority for ALL investors.
PROS: You don't have to have a property under contract to make some money; great networking
Cons: Some investors don't like others marketing their properties so check with them first to see if its OK if you shop their property to some of your buyers. It also can get risky so it's good BUSINESS practice to get everything in writing. Also, you have to stay updated with the investor because you don't want to end up selling a property that is off the market. Makes you look bad.
Little moneyWholesaling is by far one of the fasted ways to make money in REI. If you can get the right home at the right price and find a buyer for you it, you not only get to keep the non-refundable deposit, but if all goes well, you'll have a check waiting for you after closing.Now it sounds easy but wholesaling can get very technical as far as talking to sellers, buyers and agents.After a while you get a feel for things. Just know that almost all conversations you'll have ARE negotiations, so always keep ya guard up.
PROS: Make money quick, meet some very interesting people whether good or bad, and get to learn about other ways to make money.
CONS: You DO need SOME money to wholesale. For marketing at least. You can go the cheapest route and do door to door flyers in certain neighborhoods or in wind shields but I prefer neon colored business cards, flyers for laundry mats, bandit signs and a few more things.
Something you need to know first…Now you know that wholesaling is flipping homes but there is more to know than just flipping homes. You can either choose to flip private homes, short sales and/or REO's. Flipping REO's are the trickiest because the standard Florida contract has to be used and it clearly states that ''the contract CANT be assigned" so you will have to learn the tricks that industry leaders use to make around a 100k a month flipping REO's like it nobody's business.
PROS: If your buyers list is tight, you can do REO's all day with out really doing any marketing. MLS has an endless supply of REO's available for the flippin'.
CONS: Just know that most lenders require a 1k or 2k deposit for the contract to be valid but there are ways to get around this and one of them is to have a strong buyers list where you bring a buyer in and they put the deposit down because they want the property. Its basically getting the buyer exactly what they want.
Short sales.. A lot on who you knowShort sales are a little different than REO's. You can get a short sale under contract without putting a deposit but the whole process is a lot easier if you have an agent to work with.You tell them what you want and they'll get it for you at the right price to get to your buyer but this is a lot easier than it sounds. Many agents aren't "investor friendly" so it may take some time to find one that you can work with.
PROS: Lots to choose from on MLS. Can get by without having to put a deposit down.
CONS: Sometimes, the listed price is a price that the lender has negotiated to sell for and usually they don't want to budge so your offer may get countered or thrown in the trash…. Literally. This can slow us the wholesale process if you they have to go back and re-negotiate the price.
Private Motivated sellers.. There has to be MOTIVE…Private motivated sellers are people that tried the market and couldn't even sell the home if they came buy one get one free. They're FSBO's, inherited homes, probates and tired landlords. These people just have a home they need to sell and you're there night in shining offer once you show up with your CASH offer, close 14 days, plan. Some are jumping for joy.
PROS: These are regular people that don't know the market and some need money so being that you're offering this amazing serious to buy the home AS IS for CASH and CLOSE QUICKLY, they throw you the keys; sometimes with a boat in the yard. Their usually EXTREMELY high asking prices can be negotiated down to where you can make some serious money. I've seen a check by Preston Ely for 80,000 on 1 deal so yea they can be negotiated down
CONS: Some of these people think their home is worth more than it really is so you have to talk them down and it can be quite a task sometimes. You have to market like CRAZY to get a good deal for private motivated sellers. Bandits signs, driving for dollars and direct mail marketing are a few ways to pick up these leads.
OutsourcingOutsourcing in your business can cost you so much money but it save you so so much time and you know time is money right? Especially in REI. You can outsource stuff like putting seller or buyers ads on different sites on the web.What about bandit sign? Don't you hate putting those out? I know I do but you can outsource all the most grueling stuff to other people and focus your time on more important stuff…. like your family.
PROS: You can get people to work for you for $1 per hour. These are called virtual assistants. Get a team and you'll be completely free to do what you want to do in life.
CONS: If not done right, you could COLLAPSE everything you've worked hard to build. You have to actually train these people but there are steps in doing this which you should take.
I got plenty money!Having money in REI is like playing basketball in gym shoes instead of flip flops. It's a heck of a lot easier. You can pretty much do all of the different ventures above and once you learn them, hire assistants and VA's to do time consuming tasks so you can focus on more important tasks.Land lords rule the… marketJust in case you didn't know, land lords are running the market right now. They're buying properties for cash and then putting tenants in them to collect monthly cash flow.If you don't understand why this is important, then you need to read Robert Kiyosaki's "Rich Dad Poor Dad". It really breaks down what the rich are doing that many don't even know about.There's some way that investors put their money into these properties and don't have to pay taxes on the money earned or something like that but that's another story.
PROS: Make monthly cash flow while sitting at home. Hire property managers to run the properties. Some buy and hold waiting for the market to turn around then sell some of their homes for millions in profits.
CONS: Many land lords get in over their head and have to sell some of their home for a loss. Tenants are regular everyday people so they will give you problems. Also you HAVE to know certain tax laws or you'll get slammed with penalty fees and other Uncle Sam type stuff.
Private & hard money lenders ROCK!These are the people that allow you to buy homes and fix them up without ever using a dime of your own. Now if you looking to be a private money lender then you should do some research on different ways to offer up your money before diving in because you could end up with a home that NO ONE wants if your not careful.If you looking to use hard or private money lenders, many want you to put up a certain amount like half so don't think your just getting the whole amount and skip te dee doo all the way to the bank for a check.Private lenders are a little different though because these are just everyday, Starbucks sipping people that have LOTS of money. If you become friends with one, you can get 100% of your deals funded all the way to closing table. They'll get a certain percentage of your cut but everyone makes money when private lenders are involved.For someone looking to get money:
PROS: You can take on a rehab project and not pay a penny of your money up front. Make more money. Build a good relationship with a private lender and you could get 100% of your deals funded. You can do all this with BAD CREDIT.
CONS: Hard money usually requires you to put up a big percentage or they'll match what you put. Can be tough to come up with half being that you came in thinking "NO MONEY DOWN". LOL.
For someone looking to lend money:
PROS: Private lenders can make money while sitting at home sipping lemonade. You get a percentage of the money at closing. Find somebody (like me) who you like working with and you could be funding deals and step it up to pink lemonade after closing a few deals.
CONS: Cant think of any. You make money while sitting at home???? If you know any, please comment. Thanks
Well that's real estate investing in a nut shell as they say. If you have anything to add about your experience, any questions or some input, please feel free to leave a comment.- Dennis Marshall
real estate,estate investing,real estate investing,short sales,land lords,hard money,make money