I was on a coaching call with one of my students yesterday. Adam is a young man just getting started in real estate investing.
I love working with students like Adam, because he reminds me of myself when I got started in real estate over 20 years ago.
Like Adam, I was very young and didn’t have a lot of money when I started out. Not having a huge bankroll was a huge factor in my ultimate success. That’s why I’m so excited for Adam.
Having a lot of money to get you through problems you encounter can end up being a crutch that can hold you back in the long run. When you don’t have a lot of money, you not only have a strong desire for success (born out of necessity) but you are also required to develop something that is so much more valuable than money – your brain and creativity.
During our coaching call, Adam told me he was stuck with a very interesting scenario.
He had located a property that has a delinquent mortgage loan and the person on title picked up and moved to a different state. Through some determination, problem solving (ie brain power) and tools of the trade, Adam was able to locate the seller.
Although the seller has no desire to keeping the house, the property doesn’t have equity so Adam figured he would dump the lead and just move on.
Over the past 20+ years of being in this business, I’ve developed what I call a “real estate spidey sense”. At this point in our conversation it started kicking in hard.
I began asking myself, if you were to rent this property out would this property cash flow? What does the mortgage on this property look like?
Adam is a very young man who doesn’t have the financial means or ability to qualify for a conventional loan, but he would like to keep this property as a long-term rental and begin to build up a rental portfolio.
This is where we started to talk about creative financing strategies.
I showed him exactly what he could do and how he could help the current homeowner put some cash in their pocket and avoid a foreclosure on their record. Then I told Adam that he can take over the loan and not have to worry about qualifying for that loan.
All of this meant Adam might soon have his first rental property and be on his way to cash flowing. I left Adam with some homework assignments and he was so excited to pick this lead back up and start working on it.
By the end of our coaching call Adam was so excited I could almost hear him jumping up and down!
Some of the strategies that we talked about were a bit out of the box, but by the time I got done explaining them to Adam, he said he fully understood the new game plan. Right before we ended our call, Adam called me one of the real estate greats.
Whether you’re brand new to the game or have been playing it for a while, you will eventually run into a situation that is unknown to you and there is no substitute for experience. If you don’t have experience, you need to find someone who does to help you over those bumps in the road to get you to the next level.
I’ve been working probate real estate for a long time now. And apparently I’m now one of the “greats”! Thanks for the compliment Adam. I can’t wait to see where we will take your real estate investing business over the next year!
Committed to your success,
Ernie “Bank Roll Not Necessary” Vargas | The Probate Fox
If You Don’t Have the Cash, You’d Better Have the Brains