There are are number of reasons why people fail to get started in the investing world. A distinct lack of money is perhaps the biggest excuse. While having reserves to fall back on is useful, it is far from a necessity to enter the business. There are many successful investors who got started with nothing more than a passion for the business and a desire to outwork everyone around them. If money is your first obstacle, there are things you can do to supplement your income until you either find capital or a partner to throw you a lifeline.
Having no money at the outset of your investing career may be a blessing in disguise. Instead of relying on credit or leaning on other people to find deals, you can create your own path and truly learn the business. If you can keep yourself afloat during these lean times, you will gain a level of resourcefulness that you can draw on for the rest of your investing career. This doesn’t mean you have to accept your fate and can’t wait to go after deals.
The first step is to find deals that you can wholesale. There are ways you can find properties that won’t cost you anything more than your time and a tank of gas. The next time you are in the car, keep your eyes open for properties that have overgrown grass, decaying physical condition and are possibly even vacant. Houses in this condition are indicative of foreclosures and short sales. If you are brave enough, you can go right up to the front door and ask for the owner or you can mail them a letter or find the owner and look them up on social media. These steps seem forward, but in many cases the owner is looking to sell as much as you are interested in buying.
Once you reach the owner, you can offer them a discounted price to buy their property. They may not accept your first offer, but if you are persistent and they need your help, you can eventually get them to agree to your price. Once your offer is accepted, you can then reach out to investors in your area that may be interested in buying it from you. For your services, you can receive either a fee or a percentage of the deal. However, in most cases, a fee in the neighborhood of $5,000 is the norm. Additionally, if you do this enough, you will start to gain a following from fellow investors and you can start building a network where you will make money and possibly find funding for future deals. You are also gaining valuable experience talking to homeowners and negotiating the best possible deal.
You can also reach out to any property that has a for-sale-by-owner sign in their front yard. These are simply owners who don’t want to implore the services of a real estate agent and want to sell on their own. One of the reasons they would do this is because of a lack of equity in their property. If the property is a short sale, there is still a process involved in selling and you can take care of this for seller. Because of the lack of equity, the seller will not make any profit from their sale. This may be another way to get a deal at a good price. Both of these methods are time consuming. However, if you don’t have any money, you probably won’t balk about putting the work in.
Wholesaling is the quickest way to make money without money, but there are also a few other exit strategies that warrant your attention. One of them is by obtaining your real estate license. This is a little misleading because you do need money for the required real estate course, the fee for the test and money for your license. The sum of these should not exceed a few hundred dollars. For a minimal amount, you can earn money as a real estate agent. Between finding rentals and selling the occasional property, you can recoup any money spent quickly and have access to the multiple listing service. Instead of waiting for the business and funding to come to you, this is something you can do speed up the process.
The real estate business is there for those who are willing to go out and get it. Regardless if you have minimal money or have the backing of a large investing syndicate, you have the same chance to get any deal. Having minimal cash is a convenient excuse as to why you are slow or you can’t close any deals. In reality, there are things you can do to supplement your lack of cash if you are willing to go out and do them.