How to Invest in Real Estate with No Money?
The purpose of this article is to set some expectations on a more realistic picture of what getting started investing in real estate with no money really looks like for the majority of people.
Let me cut to the chase, the likelihood of getting a deal with zero dollars invested, as a naïve beginner is not great.
I’m not trying to burst anyone’s dreams because it does occasionally happen and there are many real estate guru’s that will show you all kinds of ways to do so along with the testimonials which will lead you to believe otherwise.
However this is a downfall of the information age and a very powerful tactic to capture your interest.
You see it’s a method used by marketers to lure you in and get your attention and wallet.The fact is the majority of investors who get started in real estate and have developed successful and sustainable businesses have made major investments in themselves and their business that equate to time, money, sacrifice, and diligent unwavering efforts.
The information era has people looking at all the results and hype but all too often this is very inaccurate because we don’t see the real picture of the blood sweat and tears that brought that result.
What you see is the RESULT but what what about the EFFORTS?
I have watched many students trying to do deals with no money and most of them do it all wrong.
If you have no money set aside for real estate even if it’s a couple hundred dollars your first move is to do whatever it takes to get a couple extra bucks so that you can make a little investment and leverage the results and then do it again and again.
If you have to work some extra overtime at your full time job for 3 weeks for an extra $250 instead of wasting that money do some research and educate yourslef.
Go to your local Real Estate Investors Association meeting and buy a year membership or attend some free meetup groups.
Maybe go online and watch all the free training on how to wholesale real estate, investing in real estate and rehabbing houses you can find.
Make note of the great websites, bookmark them, add your email to get blog updates. In the beginning, the best money spent is going to be on your education. Check out Ebay for used real estate courses that can be resold once you finish going through them and have absorbed the material and started taking action on the ideas that the course covered.
The next couple hundred bucks that you set aside should be spent on some higher-level training in the form of weekend seminars.
These are typically advertised at the local REIA and can cover a lot of material quickly and also give you an opportunity to get immersed with other local investors and role-play through scenarios.
Getting out of your comfort zone and meeting new people will also pay off huge as making connections and building your real estate team is an essential part of getting deals done and building your real estate business.
The people at these meetings can be your buyers, private lenders or perhaps you meet a real estate wholesaler that brings you the first deal that makes 5-10-maybe $15,000 or more and guess what… Networking is FREE, it doesn’t require money but it does require effort and getting comfortable being in entirely new situations.
GET COMFORTABLE BEING UNCOMFORTABLE!!!
In times when you are facing a new subject, situation, or opportunity is when and where growth begins. Recognize these moments and know that you are on the brink of something exciting, new, and possibly life changing.
Accept the fact that you are going to make mistakes and be ready to learn and move on.
Your education and network are priceless.
I highly recommend you seeking out a mentor or someone that you can rely on their expertise in the process that can guide you through some of the beginning stages, because you will have questions.
Good deals move fast, you can’t sit on the fence all day debating your options, you have to be decisive or you will lose out to another more prepared investor.
If you have a mentor or coach that you can email or call and get their input, it could mean the difference of landing that life changing deal.
Once you have spent some time getting your education and learning the ropes you should start doing some small marketing campaigns.
The good news is that marketing for investment real estate can be done on limited budgets. You will need some money but depending on what you have available will determine your best strategies to employ.
Below I have listed some options for a beginner investor to consider when marketing for real estate deals with little or no money.
- Bandit Signs
- Craigslist ads
- Door knocking on pre foreclosures
- Door hangers
- Driving neighborhoods for vacant houses
- Tax/judgment liens filed at town hall
- Networking with realtors, other wholesalers, attorney’s or any other industry professionals
- Small direct mail campaigns
Once you have started getting your marketing out there and taking some leads and meeting with sellers, lets assume that you have a potential deal.
Assuming we are still working on a limited budget from here you can put the property under contract with a very small deposit but it should be adequate for your market to obtain an equitable interest in the property.
From here you can then market the rights to that contract to investors, advertise on Craigslist, Zillow, REIA meetings, put out bandit signs to attract buyers advertising investment property for sale or a “Handy Man Special”.
Once you find a ready, able and willing buyer you can assign that contract to the other investor for a fee or what is referred to as wholesaling real estate or an assignment purchase.
There are many investors that just focus on this niche and wholesale many deals on a monthly basis for thousands of dollars. There are many big benefits to wholesaling. In fact it is one of my top income producing strategies for my real estate business.
Once you have done a couple of wholesale transactions, you will start to build momentum.
You may want to think about a joint venture rehab deal with a more experienced investor.
In this example you go out and lock up the deal with a contract and forego your upfront wholesale or assignment fee but instead opt for an equity position with an experienced rehab investor.
The object is to strike a deal whereby you are going to be paid a portion of the profits or equity once the property is rehabbed and sold. Instead of making a couple thousand-dollar fee upfront you can make maybe $10,000 or $20,000+ as an equity partner.
In addition to bigger pay days this again will be a HUGE learning experience because you will get to see first hand the day to day procedures, working with contractors, pay schedules, rehab draws, sub contractor scheduling, timelines, unforeseens, permitting, the whole staging process, selling etc.
Rehabbing real estate is where the big checks come from but there is more risk, time and money involved. Partnering with an experienced investor is a great way to limit your risk all the while getting a hands on education when working on a limited budget.
Each deal will be a learning experience and as you start to make more money on your deals reinvest in yourself and your business.
Remember that success does not come easy, nor overnight, regardless of what Mr. Internet tells you.
Investing in real estate is a great business to be in and can bring great people and changes into your life. Yes, you can invest in Real Estate with no money… but you will have to make an investment regardless whether its time, knowledge, sacrifice, or experience.
It does not come without cost!
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To Your Success, HFM