You Don't Need Money To Do Deals!!!!!
This is to craigthecubsfan (check out his post r.e. My Broker Tells Me I'm Not Ready To Be An Investor) and all of you other newbies out there looking to get started.
Read my lips . . . YOU DON'T NEED MONEY TO DO DEALS!!!!!
Does money help . . . of course. Duh!
Can you do deals without money . . . YES . . . without a doubt!!!!!
You can have it one of two ways. You can do deals with somebody elses money or you can do deals with little or no money at all.
I specialize in large luxury home deals now, but I certainly won't pass up a quick $30 or $40K if I don't have to do anything.
Let's use as an example, a deal I just completed. Let me explain what I did and then lets explore how it might have been structured if you didn't have any cash.
Quick facts: manufactured home on 1/3 acre of land, not on a foundation so not considered real property, needed cleaning, new carpet, minor repairs. Owners wanted $25,000 cash for their equity.
What I did (thru escrow of course): took over the property "subject to", wrote them a check for $2,000 so that they could pack up and move out, wrote them another check for $23,000 when they handed me the keys and signed over the deed, paid the mortgage, insurance and utilities for 2 months. Had the place cleaned out and the minor repairs done. Had a foundation installed under the manufactured home converting it to real property, had new carpeting installed, upgraded the existing appliances (nice used at a bargain price vs. brand new).
Listed it with a realtor, sold it 3 weeks later for a net profit (after ALL expenses, including realtors fees, closing costs, repairs, etc.) of $40K . . . all for less than a day of my time.
OK, so I put up some cash. But what if you didn't have any. How could you have done the deal? Lets be creative and GUTSY here, and take some chances. Believe in yourself that you can pull this thing off. How's your credit? Do you have a credit card? Do you own a car? Do you have something of value that you can borrow against (e.g. jewelry, coin collection)?
The only cash the seller really needed immediately was enough money to move. I could have gotten away with $1500 or even $1000 up front. See where I'm going here? How could you come up with $1500 if you were desperate?? There probably is a way. Next, the foundation guy was willing to be paid out of escrow when I sold the place. I didn't even have to ask him. The carpet, pad and installation services could have been purchased at Home Depot on an instant approval Home Depot credit card. I bet they would have thrown in an extra $50 of credit on the card for the repair supplies and you could have provided the labor yourself.
And yes, I made two months of mortgage payments at $860 per month, utilities and insurance for two months but don't you think you could find a way?
And what about the other $23,000 for the seller. Easy . . . a note due and payable when you resell the place . . . secured of course by their own property.
Your other alternative is a partnership. There's always money available if you find a good deal. Your partner puts up the cash, you find the deal and make it all happen . . . and then split the profit 50/50.
Read my lips . . . YOU DON'T NEED MONEY TO DO DEALS!!!!!
Good luck . . . and remember, the harder you work, the luckier you'll get!
These newbies are getting smarter by the day!!!!. You say you don't need money to do deals?? Dang, I never thought of that. Now I know what I've been doing wrong.
My sincere congratulations and admiration for this novel idea. Keep up the good work. I just got to have my wife read your post. I just hope she doesn't leave me.
Sammy,
I bet they can even find the cage in a casino and that ain't easy.
John $Cash$ Locke
My congratulations, you have once again repeated the teaching of many of the courses, lectures seminars and oh so many postings. I liked the touch about adding a foundation. Does make a difference now it is truly real estate gives you a great feeling of belonging.
Cheers Lucius
Quote:
On 2004-02-05 21:49, Lufos wrote:
My congratulations, you have once again repeated the teaching of many of the courses, lectures seminars and oh so many postings. I liked the touch about adding a foundation. Does make a difference now it is truly real estate gives you a great feeling of belonging.
Cheers Lucius
Yes he did repeat what has been said SO many times before BUT he put a new twist on it. In all the other posts and courses they give an example of how they did a deal with NO MONEY DOWN>
In the example he gave us he did NOT do it No money down, he USED his own cash to buy it. WOW talk about a new way to do a NO MONEY DOWN deal.
Who would of thunk it. [ Edited by MrMike on Date 02/05/2004 ]
The only problem is you used your own money. The heading states "You Don't Need Money to do Deals!!!!!" You used at least $1,500 of your own money.
Here is how to make $$$$$$ with no money:
Find the deal, get a contract and sell the contract for $5,000-$10,000. Then you move on to the next deal. If you ask 100 different people a week, you will get 1 deal a week. This requires gas money, and some flyers you can print up on your hand dandy computer to hand out to everyone you talk to.
Find a local investment group to sell your contracts through.
No money down quick and painless.
Dont let the rehab guys know it is this quick and easy to make the money.
Hey guys and gals . . . why such an attitude? Isn't this a "beginners forum" directed at those who are either: (1)exploring the possibilities of investing in real estate, or (2) trying to get started.
This forum should provide an inspirational and supportive environment for those new to real estate investing.
They haven't read or heard about many of these ideas yet . . . most of this stuff that we take for granted is new to them.
The point I was trying to make is to get out there and DO SOMETHING . . . don't use "I don't have any money" as an excuse . . . believe in yourself . . . don't let other people discourage you . . . be creative.
And yes, as per one of the posts, simply "bird dogging" is a super way to make money . . . low startup costs, great potential. In fact, I met someone just the other day who earned $80K last year doing nothing more than bird dogging small deals.
Why not use your energy helping the new investors, rather than bashing those trying to lend a hand?
frontrunner, you've sad:
------------------------------------------------------ Quote ------------------------------------------------------------------------------------------------
1) " I specialize in large luxury home deals now, but I certainly won't pass up a quick $30 or $40K if I don't have to do anything."
2) "Quick facts: manufactured home on 1/3 acre of land, not on a foundation so not considered real property, needed cleaning, new carpet, minor repairs. Owners wanted $25,000 cash for their equity."
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Are this manufactured home in fact the luxury home you been buying instead and you promise to tell us about? Congratulation on the motivational speech so well done and do come back with some more good stories. You can also add up your city and state so we know where are you coming from.
To answer omega1's questions, I like large luxury home deals because the upside potential is so big . . . but it goes without saying, that the risk can be much larger too.
If you have questions about luxury home deals we should probably move those discussions to a more advanced forum. As I am new to TCI, just let me know the forum that this topic would best fit.
Regarding the manufactured home example, those types of deals usually don't have enough money in them to be worthwhile. (Although, I understand that Lonnie Skaggs has a developed a systemized approach and knows how to crank those deals out and makes big bucks. I think he sells the homes and either sells or holds the note.) Anyway, this deal just fell into my lap (I do a lot of local marketing) and I wasn't about to turn down that kind of profit for so little effort.
Regarding location, I am in Reno, Nevada.
I live in NY and needless to say the prices are rediculous! How can I do these kinda deals if prices are so high?
gsrgirlie,
The same principles apply in higher priced areas. Your best bet is to just find properties and assign them.
I don't think assignment is the only option. I bought a house for 0 down a few months back, did a little clean up and fix up, and have it under sale contract for a 15k profit due to close on the 25th.
The seller was motivated and was willing to work my down payment and closing costs into a cash rebate at close. All you would need to do in this situation is get someone to loan you 15k for a day
-Chris
_________________
Live long and be profitable![ Edited by c-brainard on Date 02/08/2004 ]
c-brainard,
Yes in TX is not the problem bu in NY? It's hard. Ron LeGrand teaches his students to not look for the properties in the war zone but guess what, it's a silent war going on in all large, coastal cities and here in LA and them in NY properties are often not even listed at the MLS so the agent can avoid sharing of commission. Motivated sellers are still there but neither they now that they should be motivated ( live in denial and in pre foreclosure depression) or their property just sells to easy to become one. Well, I suppose we just got to work a little harder.
You posted a deal where you used your money but could have done it diferently.
Geez, had I picked 6 diferent numbers I would have won the lottery.
I'm the first to agree that I had it very easy with this deal because I happened to have the cash in hand.
Obviously I didn't make my point clear enough in the post . . . next time I'll try to spell it out better.
I was trying to show by way of example, that even with little or no money, someone who was creative enough and tenacious enough could have potentially made a similar deal happen.
good point , Enlighted us with more of your deals. I agree don' t just sit there go out and do it.
Appreciate the example.
Thanks,
Nick
This is how this deal was done. It's not to say that it's the only way it could have been done.
Let's say he would have tied up the property under contract, found a buyer with crapy credit and told them that they needed $4000 to buy the house. Use that money for the uhaul and fix up.
Another option...Private money, line of credit from the bank, Grandma's HELOC.
Additionally, he's only talking about a few thousand dollars. If you think that all of that is beyond you, working a second job for 20 hours a week for a month or two would do the trick too.
Perhaps the buyer would have moved on his credit card, as long as he gets his $1000 within 30 days.
Just my 2 bits.
I'm confused. You claim that you can buy property with no money, then you say can't you put together a credit card, grandma's HELOC etc... That is money. Maybe you don't need $500K in cash, but you still need something.
I'm a relative newbie, I own some property, but I do know, that I couldn't have bought it based on my winning smile.
I also agree with everyone about NY. Damn its soooo high here. I just saw a home here sell for 4X what the guy bought it for 3 years ago.
It's hard in NY huh? Try it in Antarctica and then come talk to me. NOBODY wants to live there.
Seriously tho, REI concepts apply everywhere. Nobody really cares if you say "oh my gosh, it's so hard in my market, homes are so expensive." Adapt and overcome or be eliminated from the field. Excuses are for losers. Being successful is just a matter of luck, as any loser.
Ryan J. Schnabel
I dont think i said it was hard. I said it was HIGH. There's a BIG difference.
Pun Intended.
FrontRunner:
How many deals did you do last year in
Vegas? Can you give us an example of just one luxury house deal you did?
Just curious?
Best Riches,
Jeffrey Adam
[addsig]
You buy a house sub2, talk the owner into taking a 2nd back or there equity when you sell it. There are no arrears to settle up. The sellers totally rehab and clean the place before they leave, pay all the utility's for you untill you sell it and buy a new insurance policy while they are at it.
Who's going to make a payment just 30 days or less from when you bought it. Who's gonna pay the guy to mow the grass a week after?
You might not need money? Okay well, you gotta have somebody's money!!
while the post might have been a little misleading who cares...what you did was creative financing and for beginners or people that want new ideas about ways to make money in this arena it offered some insite. There are those that always have to add there two cents in here and apparently are old pros that are just tired of hearing it....they know how to do the deals and they do them...some and I wont mention names I have seen continue to just bash and have no place on here as far as I am concerned because they rarely offer any information and are of no help.....Dont let them get to you if ........if they are infront of their computer knocking you they either are so rich now they no longer need to work at it or they are just jealous that you are out doing it while they are sitting in front of the their own computer........Now as far as the "No Money Down" thing I think for the most part that is next to impossible very rarely is someone going to just sign over their home without you offering up something.....I have never tried it because I have been able to always have a little something to go towards a deal......What I get concerned about is the Kid reading on here that decides not to go to school because he thinks he can get into real estate with no money and get rich and provide for himself right away..........it may happen but I m sure it is a really REALLY low percentage that succeeds at it....................
B
Bman,
That is the whole point. So, many folks post posting of pie in the sky deals that "could have been done such-n-such way......" but were not.
I dont think we should be inadvertanly misleading the newbies...heck Im one myself, by oversimplifying things. There is to much liability and hidden charges, not to mention responsibility that has to be taken in to consideration first, and not taken lightly. it could be costly.
I agree with that completely and also know that many have made a fortune selling the same concept wrapped in a different package.........just not my money
Exactally!!!
OK, lets divide the half full from the half empty crowd and move on with the back slapping!
Congratulations on a creative deal that has made money for you!
Everything here has been explained step by step and the fact that you had 25K to do the deal is irrelevant(though I am sure it improved your confidence level. If you would have used hard money and bought it outright it would have made little difference in the amount you made on the deal ( I calcualte less than $800 with an 18% loan) judging from the numbers you have given, "Hard Money" would have been easy to come by for any individual regardless of their FICO.
Once again, your glass is half full and I congratulate you![ Edited by Stockpro99 on Date 02/23/2004 ]
If you are going to buy houses and expect to sell the contract to a rehabber, you had better be sure that your numbers make sense, or else you will find no rehabber to buy your contract and you would then have to come to the table with real $$$$$$