No money down - really?

Sorry to say that, but you are over thinking this thing way to much. First off, I think you need to straighten your mindset. That is your part first. Second work on buyers list. Create, make, find, market for those who are buying in your area. Why you ask? Those are the people thatt will put up money. Work a raport or make them your freinds list/aquaintance;-). Find out what they like and where they buy, then you go shopping. Does this make sense? If you still have more and more doubts, you just wasted thousands and thousands of your dollars.

So recap. Mindset, buyers, then shopping for houses. Greatest advice I got: imagine that eveything you do is success and failure does not exist.

I can relate to you, as I am an over worrier such as yourself......

So let me try to ease your mind a bit

Sealua is right you have to get your ducks in a row.......

But let me address your concerns......

Concern 1:

I have a fairly good credit score but my debt to income ratio is way above 41% and it won't even allow me to refinance my own home let alone purchase an investment property.

Proactive approach:

find your quite place where you can breath, ease your mind and think calmly. As well as logically,and point by point method of addressing your issues. Once you breath, get a yellow pad and do the following;

What is my gross income/ what is my net income?

What are my expenses ? (both personal and business wise use separate yellow pad pages )

What are my core necessities to sustain and keep me afloat?

How much do I have in a reserve? (do you follow suze orman? If not she suggest 8 months of an emergency fund)

Then is there anything you can barter with? Say a vehicle that is considered luxury instead of compact( do not worry you will get an even better car down the road if need be, but piece of mind is critical to your over all health and vital to your business)

How many cards do you have and are they over 35% of their credit limit if they are I completely understand your frustration I have been there. However are there recurring charges do you need those charges to remain if not downsize those extra unnecessary expenses.

Concern 2:

I just got involved in real estate investing less than two months ago. After spending thousands and thousands of dollars for real estate education and programs, I'm finding that I am tapped out of money and credit cards now to the point that I can't do any deals. I don't have rich friends or relatives to help me out either.

Proactive step:

Who did you invest so much with in real estate education? I personally know with Dean's system everyone of my naysayer co-workers and family/friends do not get, you get more then your money's worth. Here's why you get support and not dried up recycled information that has been floating around. Regardless who it was, you are in great hands here with the DG community.

So part of this proactive step is to download the free and yes they are Free books Dean has on this page, read profit from real estate right now in 30 days (we use the acronyms to refer to the books here) and read it threw the reason I say this, it's because you need to know from start to end the method if teaches. And two we discuss this book heavily and then create a journal. Fill out your bio in greater details. And as you take your steps we will guide you and give you pointers to refer to either from the book or what we had to overcome in the very steps you will follow.

I have more to address just give me time to write it out.

Follow up

Concern three:

I hear from all the real estate instructors that you don't need money to purchase real estate. If that is truly the case, what about these costs that are generally required to do a deal prior to close (I understand you can get some of these costs back after the deal but I'm talking about before the deal is done)?

Proactive step:

What you are mentioning here is a double close, and the way not necessarily around it but a similar approach is

An assignment of contract.

However, (yes there is a but) please check with legal counsel if it is permissible in your state. Remember we are not lawyers so we can not give legal advice just personal experience.

A second approach is called "bird dogging"

Both these techniques requires no money but assuring your position in both is critical to maintain your profit in the process.

Guess what it is in profit from feral estate in 30 days ! And once again it is free and you have the support of this community

2nd follow up

Concern four:

The hard money lenders I've spoken to only lend to corporate entities, so you'll need an LLC setup prior to your first wholesale double-close (A-B-C transaction) deal. Where do I get the money for setup costs, business licensing and filing fees to form the LLC?

To make the contract with the seller legally binding, you will need earnest money (at least $500-$1000). Even if you put the earnest money into an escrow account while you are submitting offers it will still need to be REAL money. Within 48 hours of seller acceptance that money has to be there, so where does that money come from?

Proactive step:

Assignment of contract takes care of this since your end buyer and not you will supply this.

However, running comps is crucial, your power team member the realtor can help you with this. And to guide the realtor in the right steps and according to how you will structure the deal in the book they will give you great guidance in this.

Concern five:

Before CLOSING a deal and even before signing a contract with your buyer, you need to look at the property and determine what the repair costs would be using an inspector or contractor in order to run the numbers for an ARV price. You'll also need to have an appraisal done. What about the appraisal, inspection and contractor fees and how do I pay those costs prior to selling the property to my buyer/investor?

Proactive step:

I want you to spend some time on this page and go to the home page, look on the left side, go down to student resources and select that. Dean gives us a simple check list.

Then when speaking with a motivated seller ( key word motivated ! ) ask the owner questions about the property, any repairs, and issues that need to be addressed, and finally any liens ?

To try your best at guesstimation if money is tight go to lowes, home Depo or any merchant of similar nature and simply inquire about those pieces and then call your contractors of respective fields of work and ask they for an estimate of labor if you purchase the materials (thank you Joe Jurek )

Another thing

With concern five:

Part 2:

You'll also need to have an appraisal done. What about the appraisal, inspection and contractor fees and how do I pay those costs prior to selling the property to my buyer/investor?

Proactive step:

Receive a quote from these professionals and ask if they are members of their respective associations or the nature of what they mostly do I.e. Multi family, single family homes, etc

Excuse me I may be a bit tardy with the other concerns but I will address them

I guess a cash buyer could pay for an appraisal if they want one, but when they do their DD, they probably won't do one & rely on their numbers. You usually pay for an appraisal if you're buying the home with financing (loan or whatever). So, if you're wholesaling a deal, don't worry about the appraisal. The end buyer will take care of it, if they get one.

Any business venture requires some sort of financial backing. The old adage "it take money to make money" is as true now as ever before.

John summed up well with his last paragraph:

"Tested and proven strategies......as opposed to just theory."

This is being over explained here. As Hurst says, you are over thinking, which is what most everyone does in the beginning. Everyone is very afraid that they will make a mistake at first and so they never do anything.

If you have little or no money to start with, don't worry. Most of us have been in the same situation. It is TOTALLY true that you can do it with no money. I have done more than 20 deals and never used a dime of my own money!

As Hurst said, build your buyers list. ALWAYS be building that and find out what they will buy, if they are liquid, how soon can they close, what is their exit plan (buy and hold buyers will buy at higher prices than flippers) and how many houses they will be looking for.

If you have no cash, don't work with the MLS at first. They WILL require EMD. Concentrate on FSBOs (for sale by owners). With FSBOs, you are in control. I put $10 on my contracts for the EMD but have never once put up even that money.

I DO use bandit signs for the majority of my leads. The best place to get them is SignWarehouse.com. Yellow coroplast 18x24

SS-CP2418YL Endura Cor-Plastic Sign Blanks - 24 inch x 18 inch - Yellow 0.4 box of 50
SS-END-STAKE EnduraSTAKES - Box of 50 - 10 inch x 30 inch 21.05 1 box has 50 stands

This with your shipping will come to a little over $100.

You can also put free ads on CL (Craigslist). This is where you can also sell props once you get them under contract if you don't have a buyer lined up already. Be sure to know how to do your numbers properly! This is very simple, but it is unbelievable how many people who have been playing at this FOREVER still don't know how to do their numbers! If they aren't right, you will probably not be able to sell it, because it isn't a DEAL!

When I find a buyer, I assign the contract and get my check for the assignment fee. I then take the original PA and the Assignment Agreement to the closing entity (escrow co/title co, atty or whoever does closings in your state) and that's it!

Honestly and truly, no money down!

I also do LOs with no $$ down. This is what I specialize in. Have done many of them. Even had a SELLER give me $24,000 up front to take over her property. The property was not behind or ever been late. She was getting married and they both had houses and didn't want two mortgages. Have actually had three who have been in that boat, but only one paid me to take it for them.

It can be done and many of us are doing it all the time. You will see the diamond symbols under our pictures. That shows that we are doing it!!! There are a LOT of us!!!

Karen

Diamonds or not......

It truly starts with your mind set.

As you can see here clearly, we are here to help along the way. I believe I no longer need to give long winded responses.

I just hope our advice has truly help you, in your aim and ultimate end destinations.

You are ABSOLUTELY right about the mind set. I believe that the mind set is 90% of whether you will succeed or not.

Karen

A couple of other points.

1) As Dallas said, you don't need an appraisal.
2) NEVER pay for an estimate from a contractor. They should do them for free, hoping to get the work.
3) A bird dog does not get paid if the deal doesn't close. Just make sure they understand that up front. That is the standard way it works.

As far as your contract, It doesn't matter what PA you use. What matters is that you read and understand it and insert the necessary clauses. Always try to use YOUR contract when dealing with the seller directly. If you are using a realtor, it's ok to use their contract but be sure to insert your key clauses. This is to protect you and allow for exit strategies.

A contract must have the name of the seller and the name of the buyer.

The address of the property being sold

And it must have the purchase price.

1) If you are the buyer, make sure it says your name and/or assigns. (you can only do this with Standard Sales. Not when it is a SS or an REO. If you are the seller make sure that "and/or assigns" is NOT there and VERY IMPORTANT put a clause saying "This contract cannot be assigned". If there is NO CLause saying this, even w/o the "and/or assigns" after the name, it CAN be legally assigned!

2) A PA must have a closing date.

3) As the buyer, Have a "Subject to walk thru and approval of walk thru within 14 business days of acceptance" contingency. (By inserting "business" days, that slips a little extra time in for you)

As the seller, "Property is sold AS IS with no warrantees and no guarantees.

4) Clause saying "Must have clear and marketable title"

Must be signed and dated by both parties, specifying "Buyer" and "Seller"

That is pretty much all you have to have to make a legal contract in any state. Of course, I am not an atty but if you cannot afford one at first, if you have all that done, once you take it to the closing entity to open escrow, they will guide you further.

That should help a little more.

Karen

- Not too many ways around the LLC. Here in California it's $800 a year whether you make a profit or not.

- Purpose of earnest money is commitment. You must almost always put down something in order to be taken seriously. Additionally, it protects the seller if you decide to pull out without just cause. That money is there for a purpose, it just can't be swept under the rug.

- Attorneys almost never work pro bono on real estate transactions. They will require a retainer or consulting fee every time. Attorneys are notoriously expensive and charge for every little task.

- Although contractors don't charge for estimates, you will always have to pay for any appraisal or inspection service.

- Bird dogs don't care whether the deal fell through because of some red tape or the end buyer's inability to finalize the deal. All they know is that they passed along a property with a motivated seller. They've done their part once you sign an assignment contract with the seller. If the bird dog does not get paid for their service, then kiss that bird dog goodbye forever.

Your worrying about the "What Ifs" and the negative side of things before they happen. Keep a positive mindset first and believe in everything Dean teaches you to do. If you don't have any money you have to wholesale until you get some money coming in. And no you don't need any money technology to wholesale. Find a motivated seller, then find a buyers and match them up for a nice fee in the middle. Dealing with FSBO's you only have to put anywhere from $1-$100 down on a deposit and if you don't have a deposit you can have you buyer fund the EMD. Also you can buy a property with no money if you find a private money investor and partner up with him on a deal where you do all the work and he funds the money. Read Dean's book 30 days to fast cash offered for free on the site.

This all started from a seminar we attended with Scott Mcgilvray from "Incime Properties" from HGTV. We have an income property and thought we could learn a few things. The next thing I know I'm spending all kinds of money on education. The money I spent was for a 3-day event with Kory Thurston, as well as a tax lien program, asset protection program, housing for disabilities program, PropTrend software, and signed up for a "Diamond Package" worth over $40,000 for months of hands on training, boots on the ground, buyers summit, etc. This last one fell through only because we couldn't get a HELOC on our house but I paid the $3000 to get the traing videos instead - some of which I saw Joe Jerek and it is because of him that I am on this sight. I don't know if this involves Dean's "Insiders Edge" or not but I hear a lot of familiar programs in his webinars.

As you can see, I was very excited to learn how to do this right. But the more I read, watched and listened, the more I saw them gloss over these expenses. I am truly tapped out and now I want these programs to pay me for a change. I just can't sink any more money into these educational programs. I work really well with step by step procedures rather than general information.

I did download Dean's books and I will read them now and work on my buyers list. I'm not afraid to do the work, I just want be successful at it and do it right. The bottom line i guess is that I would rather be prepared for reality than consoled by fantasy.

Thanks again everyone for spending your time with me on this.

I downloaded and read Dean's book - 30 Days to Real Estate Cash. I even converted it to an audio mp3 so I could listen to it in my car. It's a lot to absorb over two days but I will be doing the homework as outlined.

I need to make the most money as soon as possible to get my debt under control so I'm thinking of Double-Closes and Assignments. Bird-dogs don't seem to get paid much in comparison.

If I need to do a "wet close" using transnational funding, how do I pay closing costs, back taxes owed on the property, etc? These costs aren't included in the loan from insiders cash. Is there a way to get this cash from the cash buyer prior to their close in the deal with me? If so, how is that written in the contract?

Thanks,
John

If you're using an LLC to purchase a property, Double-close, assign, or whatever strategy - do you have to use your name or can you put the LLC's name?

Hey John,

If there are liens or taxes or whatever on the property, they get cleared up at the first closing, it will all be on the HUD. If you are getting the prop for $50k and they have $2k in taxes, $10k in liens, and owe $20k, your getting $50k plus closing fees from transactional funding, the seller walks with whatever is left after the mortgage, liens, taxes, and his closing fees are. Not sure if dry closings are ok down in Florida but if you can find an attorney to do that, you won't need TF.

Do everything in an LLC, and there are ways to buy in an LLC and then sell the LLC so there isn't a second closing, which saves money, but then you need more then one LLC. You can also do that with TRUSTS, but you need to make sure your buyers are cool with that.

it doesn't matter how much money you spend on materials, trainings, etc. the bottom line is that you need to take action.
I also tend to get hung up on reading everything (I'm an engineer so that's a given); heck, I always read instructions to everything I purchase, even a blender!
When I first started investing, I joined the Success Academy, and I would be reading all the sections, and answering all the questions, setting up my LLC, etc... but I was not out there putting up bandit signs, or making offers! So nothing was happening. It didn't matter how much I had spent on the SA, or other programs Dean offered.
If you don't have any money to invest, you can wholesale, birddog, or partner with another investor(s).
Join a rei club in your area, and attend their meetings! Bring your business cards (you can get them free at vistaprint. com, only pay shipping) and exchange them with other investors there. Ask if you can contact them when you have a great deal! Believe me, once you start taking action, things will come together!

Wishing you great success,

I agree with Val/Karen/Insider Notes, you can do dry double closes if you have an attorney that will do them, tell your buyers that you dont have the earnest money(for mls props)& when you get one accepted you want them to pay the earnest $ dep-others have done that.

Like Karen said you can just concentrate on fsbo's if you dont want to mess with earnest $ or double closes, you will get a deal if you work hard enough & like everyone said stay positive-everybody on here cant be lying they are doing deals, some are doing hundreds & a couple thousand deals so you are in the right place. You can do it if you want to, you are close keep the momentum going.

Remember, you have taken action! What 90% of people don't do so you have momentum going, now you have the reciep(30days to RE Cash)& you wont let go until you have your 1st deal, & 2nd & on and on. We are here for you.