How to Invest in Real Estate With No Money and No Credit
You may have seen the late night infomercials of real estate gurus espousing the secrets to investing in property with no money and no credit. But is it really possible?
The simple answer is yes, someone can start investing in real estate with little or no money and with bad or no credit. There are plenty of real life examples of people who have done it. The good news, success leaves clues as the old saying goes and there are some very concrete steps that you can take to get there. Below are a series of steps one can take to get started.
1) Choose a niche within Real Estate
In the real estate market there are many areas of opportunity to invest and make money. So many in fact that one can feel overwhelmed and find it hard to begin without a little focus. Therefore, the first step is to choose a specific niche within real estate. Choosing a niche helps you stay focused so you can learn one area before moving on to other opportunities. Also, another side benefit to choosing a niche is that the information you learn in one niche will be easily transferrable to other areas within real estate. So what are the niche areas?
For instance, there is one niche opportunity where you can deal directly with homeowners who “do not” have a strong emotional attachment to the home and are willing and motivated to part with the property. This niche is known as probate real estate investing. Probate is the legal processes that one goes through when they have inherited a property from someone who has passed away. The probate real estate investing niche allows a real estate investor to buy the property at a discount and to either sell or hold the property.
2) Becoming knowledgeable in your chosen niche
The next step after one has chosen a real estate investing niche is to become educated in that niche. One can read books, participate in local real estate clubs, network and converse with other beginning, intermediate or sophisticated real estate investors. One other great way to learn the business is to work directly with a mentor — somebody who knows the ins and outs of the real estate investing business and can answer the questions a beginning investor may have.
3) Taking Action
The next step is to take action. You do not have to wait until you have all the knowledge—but once you have enough knowledge to get your feet wet, get out there and start taking action. Most people are held back because they simply get stuck in what is frequently called “paralysis of analysis” mentality. This phrase means that it is much more comfortable and easy to stay within the “learning or book” stage than it is to get out there on the field of actual real estate investing. Therefore, it is important that you take action. However, once you decide to take action, one may ask “What am I going to take action on?”
To start, you want to take action on two things. First, assuming you have little or no money, you want to start developing relationships with people that have money. Many people who have money for investing simply do not have the time to find the right properties or the ambition to pursue opportunities. Instead, they look for partners.
The good news is, the pool of people with money is big and you do not have to work hard to find them; the majority of times the resource is within reach. It could be a relative or friend who may have some money sitting in the bank. It could be a business associate or local doctor or dentist. It could be a colleague or a person you meet at a local real estate club. Keep in mind, the greater your network of people, the greater the resources that you will have at your disposal. Most people with money to invest have a desire to get higher and better returns than what they are currently getting. If you can present the right opportunities to them, then you will be serving a huge need.
4) You Are the “Solution”
If you have no money or credit to invest in real estate, keep in mind that you are the person that controls your desires, your emotions and your thoughts. So you first have to think, “Who has the money to invest in real estate and what assets do I possess that would be valuable to them”?
If you can supply the legwork to go out and acquire properties that make good financial sense, you will find people with no time but who have money. The key here is developing a relationship with people that need the knowledge, time, and action that you have developed. In essence, you become a solution provider to their problem and able to create a win win for everyone involved.
About the Author
Ernie Vargas provides more real estate investing information, especially for the novice and sophisticated probate real estate investor but also applies to anyone who wants to be successful in real estate. Stay up-to-date at ProbateFox.com and while you are there, don’t forget to sign up for Ernie’s popular, no-cost online probate real estate training course!