I'm Confused !!!!
I was a little confused about no money down deals kinda like the ones that the gurus teach,,they say that the down payment that you give a seller,, say on a wrap or cfd comes from your buyer hence the no money down part of REI....How does that work exactly do I put the house under contract and agree to givseller say $ 5000 down and a closing date of 30-60 days,,,and then start marketing to find a buyer that will give me $ 10000 on a wrap or cfd...if I close with the seller first how do I get them there money I meen I would have to close with my buyer first and then with the seller.....In order to give them there $5000 witch would come out of my $ 10000 that I got from my buyer....you can probably tell I'm a little confused........ I guess I might be a little off on my timing of how the process works,,,I'm also concerned that if I close a deal with my buyer is'nt that the time I give them my $5000 and then start looking for a deal..........I might even be confused on what they meen by no money down........Please help!!!!!!!!!!!!!!!!!!!![ Edited by mjdreal on Date 01/25/2004 ]
You see what I'm slowly coming to realize is that you do need money to start with in the REI world and how bumed I am to admit it have have none,,,I basicaly make what my bills add up to....Since I just bought my house I have no equity to pull from........Now I know there's got to be a way around this delima so I was thinking about a lender but found that most of them will only give me up 75% LTV so hopfuly I can find some houses that are below that......Just curious has anyone else ever been where I'm at........I got to thinking what about straight options....Any way if you have any thoughts let me know................MD : )
I know that some gurus make it sound so easy.........and it really basically is. Entrenpreneurs find solutions to problems...thats what makes them entrepreneurs. When you feel like you've hit a wall, keep thinking. You'll think your way out of it.
We started with equity in our home (we had $40k in equity 4 weeks after close of escrow and that was with no down payment...a VA loan, so keep an eye on home prices...you might be surprised that you have equity already). We also relied a bit on credit cards as well. But BE CAREFUL when you do.
I've heard many people start by birddogging. Find some investors and find out what kind of properties they are looking for. Most fellow investors are very friendly and will be some of your best teachers. You can make fast cash birddogging and/or wholesaling. Use that to start buying your own properties. I am always looking for birrdogs in my area, but the furthest south I am interested in is Atwater.
Check to see if there is an REI group in your area. Might have to drive a bit. I bet there is at least one in the Fresno area....
[addsig]
True no money down deals are hard to find and pull off.But not impossible. You need to find truly motivated sellers. In order to accomplish this you need to be able to buy the house for 50-70% of FMV.Hard money lenders will usually give 100% financing on a deal with this type of equity.
I do all my deals with 0 down. I am using a hard money lender and am buying at 50 to 70 % of ARV. They loan 100% and more of the actual costs. I have done other ways too. One I put under contract for $30,000 and was showing to a tenant/buyer at $50,000. He saked if $5000 would be enough down. I sais yea sure like you have 5 grand. He reached in his back pocket and started counting out 100's and when he got to $5000 he put the rest back in his pocket. I do not know how I kept from passing out. I had to wait to give him the key because I did not even own the house yet. I wish they were all this easy. He still lives there and making payments almost 5 years and never late. When the market is really bad you can get free houses with large loans however. Some I took over at $70,000 are now worth $120,000 and up. I had 30 of them at one time with 0 down. Wish I still had those but the market took tooooo long to rebound and I too gave some Ca dude a super deal.
Good LUCK and Thank You
Hope this helps some
Ted Jr
Good LUCK and Thank You
Hope this helps some
Ted Jr
Thanks for all your help!!!!!!!! Hey I was just thinking could'nt I find a hard money lender that would bail me out if I could'nt find a buyer before I was going to close with my seller... If I get the seller to give me say 2 months before I make my first payment......And get a HML to front me the down payment and wait till I find a occupant to get there money back........I know I am writing as though I'm a newbie...So if you don't think it's a good Idea than let me know and if you can point me in the right direction for that HML please let me know( sorry I'm trying to make where I'm not soliciting for a HML ) Thank you for all your help and wisdom.........Matt D
I would also start running an ad:
"Investor with proven track-record looking for investor's to make 12% on
their money secured by a first trust deed."
You could offer to pay investors 2pts with 12% interest and 100% financing.
Once you realize the power of private money, your real-estate business will
explode!
Best Riches,
Jeffrey Adam
[addsig]
Hi mjdreal,
I can understand your frustrations on how some Guru's say that you buy real estate with no money down. Some will expand on this thought by telling you ...."It doesnt mean that the seller wont get any money, it just means that you will be completing the transation by using someone esles money, not your own." You can do this by using HML's or Private Money. If you have read my article, you will already know that private money is my absolute favorite.
The good news is that you are in the best situation possible to be successful at real estate. You have already shared with us that you dont have much money, but you have the time to educate yourself and become specialized in the RE business. If you can show an individual who has excess dollars how you can give them a good reaturn (short or long term, secured by real estate), chances are pretty strong that they will lend you the money. Remember, money follows opportunity!
I meet a lot of people who have money, who dont know what to do with it. They arent really interested in becoming a specialist in anything. And if I started out with a lot of money, I may have been the same way. But the good news is that I started out flat broke . . . with only a vision of success that I wanted to conquer!
When I started in real estate, I was in your same position. Not much money, but I had an incredible appetite to succeed as in investor. And because I did not have money, I had to learn how to find Private Money Partners to fund my deals. Since I was hungry enough, I found them. And I know that you can too.
Put your game plan together, and move forward with success!
BAMZ
Thak you guys for your help and Bamz I will read your article you have inspired me AGIAN,,,,,,, It's nice to know that some one else has gone throught the same as me and made it all work...My father keeps telling me to go to a electronics school and I keep telling him that if I do that I will still be working for someone else and still be putting in 60-70 hours a week,,,,to me thats not the kind of life I want to live...I want to be able to go fishing and smell the clean fresh air and not have to feel like I have to be at work come monday morning...I want to take my girls to soccer practice and to dance rehersal and not have them feel that every time I wake up they have to ask daddy has to go to work or ask daddy please stay home today......One thing I relize is that real estate is one of the best ways to do excalty what I want ( TO LIVE LIFE NOT JUST SURVIVE IT ) I do have one thing stopping me and thats I'm a thinker brain,,,I'll sit here and analize every sonerio and every problem that can arise,,,,,,,,,I need to break out of that and start running adds and taking chances............thank you for letting me ramble,,,,,,,,,,,,,,,,,,,,,,,,,,Matt D..... [ Edited by mjdreal on Date 01/25/2004 ]
Have you all ever tried to put an add in the paper to find private money lenders...I have never thought about it but you could realy put an add in the paper for just about anything...thanks for the good idea...............Matt D
Maybe I sould start with lease options...I know there is more of a chance or having a problem with the seller,,,But is'nt it a good way to start out.......Acording to some you don't need to have alot of money down on these type of deals,,,,,,,,,,,,,,,,,,,,,,,,,
Matt,
Are L/O's a viabale way? In theory yes. But why limit your options when you can simply get the deed and become the owner with the same amount of time and effort?
In my earlier days, I use to think, and re-think and think again through my options so much that I was in paralysis. One of my successful RE friends was very stout with me one time and he told me to . . . "GET OUT OF MY OWN WAY". And when I did, the opportuniteis followed!
So I share that with you an an effort to help you to "Get Out Of Your Own Way", and dont hinder your investing opportunites. If you know about Private Money Partners, you should be spending a little time to get a few on your team. You can do sooo many more transactions with a PMP than with simply relying on a L/O.
The only person that can make this happen for you . . . Is YOU! It may be uncomfortable for a short while, but it will build character and it is well worth it!
Best of Success!
BAMZ
Thank you Bamz.....I'm going to run an add in the aper this next week to find a private money partner....I Don't have any one realy inmy family that I could trust or that has the monet to loan to me...I think I could use a pmp to help me put down payments to sellers and then pay them back,,,,plus a little extra.......thnk you for your help,,,,Matt
Matt,
Locating PMP's is a constant thing. Dont get discouraged if you dont get any with your first week or so of running the ad. Plan on running it in the real estate section for a week here, or a week there. Also meet with local professionals who have clients bases of people with big dollars. Accountants, Lawyers, Stock Brokers, etc. They may have clients looking for an opportunity that you can offer them.
Remember, it wont happen overnightm but if you focus on it and make it a priority, it will happen!
BAMZ
Thank you Bamz,,,I have two HML but they require the loan to be over 1k,,,,I'm sure that I will need it in the furture....I think I'm going to come across times that I will only need 5-10k to put as a down payment to a seller ,,,since I still have'nt mastered the concept of using my buyer's down payment to pay my seller there down payment........