Investing in Real Estate with No Money - Part One
There's a hard truth out there about getting rich and it's this; if you're already living as if you are rich, then you will never become rich. That means if your credit cards have a huge balance and you're drowning in debt, real estate investing is not going to rescue you.
I know... those guys on late night television introduced you to people who got out of debt and quit their jobs just 60 days after taking their real estate investing course. Let me tell you first hand that if those testimonials on t.v. are real, those people are the exception, not the rule.
You can, and we believe you WILL, create massive amounts of wealth through real estate investing. Set your goals, find properties that meet those goals with plenty of good research and then hold onto them for at least five years...preferably longer. It works... look at the richest people in your city. Of those that are self-made, I bet at least 25% of them did it through real estate. We always go through the richest people in Canada and Power List for Vancouver, and this number holds up.
The trick is to learn what you're doing, and then accelerate your investments after you have built a base of knowledge and equity. It's not the only way to make millions in real estate...but it's the way that requires less money, has the least amount of risk, and induces the least amount of panic attacks.
We started out with $16,000. Thankfully my wife Julie was a saver. When she graduated from University and started working as a sales rep, she continued to live like a student. And, she put every extra penny she had into paying down her student loan. When that was paid off, she proceeded to save any extra money that she had. Her plan was to go back to school for her MBA so she wanted to have as much cash in the bank as possible to pay for school.
When I first met Julie, we had very different lifestyles. I was enjoying the money I was currently making. I went out a lot, drove a brand-new Volkswagen with financing, and had some credit card debt. I also had a piece of property that I owned with my mom. But when I met Julie she talked about retiring at 35. She spoke of it so clearly and had such a good plan, that I knew it could happen if I worked at it too.
It took a lot of work on my part to pay off my credit card debt, but I did it. I then started to save a few hundred dollars every month. But the reward was worth the work, and we started to shop for our first investment property.
Thankfully, we had Julie's savings to help us with our first purchase, but if you don't have enough in savings, don't worry. There are ways to buy property without money.
You may have heard of 'no money down' programs, and though they certainly exist and they can work, they're also very risky. Usually this is too much risk for an average person to handle, and why would you want to handle it anyway? Especially when there are three much less riskier ways to get into real estate investing:
1. Your own savings (cash out stocks, GICs, and even retirement savings in some cases)
2. Your home's equity
3. A partner with cash.
Here's the hard reality that you won't like to hear though. Finding a partner will be next to impossible if your own finances are ugly. If you have no experience investing in real estate, you are deep in debt and you are trying to get rich on my money, what exactly is in it for me, as your potential partner? It just sounds risky to me.
However, if you're in 'good debt' (like the kind that comes from student loans that you have been diligently paying down) and if you've done your research on real estate investing, then a partner starts to think differently about your debt. After all, you know how to control your money, so you won't waste his/her money. The potential partner feels that you can be trusted and that any risk to investing with you is slight.
See what I am saying? This person has no money, but they have the right mindset about money. They are in debt for a good reason AND have been diligent about debt repayment.
Before you can buy a single piece of property, you have to be able to control your own finances. This gives you control of your destiny. Living beneath your means is the only way to do that. If you're unsure about what you make versus what you spend, try this: for the next six months, keep track of every penny you spend. Once it's there in black and white you'll be able to see how you're living and where you can make changes.
I can imagine what you might be thinking - "but, Dave, I always spend a lot during the holiday season", or "we've been planning the trip to Europe for two years"! Don't fret- if you've saved up for those things, you deserve to do them. But, if you are going to end up going into debt for those things, you may have just discovered that you are a SPENDER, not a SAVER. If that is the case, you may not be ready to start growing your wealth and becoming a rich real estate investor. - 23229
I know... those guys on late night television introduced you to people who got out of debt and quit their jobs just 60 days after taking their real estate investing course. Let me tell you first hand that if those testimonials on t.v. are real, those people are the exception, not the rule.
You can, and we believe you WILL, create massive amounts of wealth through real estate investing. Set your goals, find properties that meet those goals with plenty of good research and then hold onto them for at least five years...preferably longer. It works... look at the richest people in your city. Of those that are self-made, I bet at least 25% of them did it through real estate. We always go through the richest people in Canada and Power List for Vancouver, and this number holds up.
The trick is to learn what you're doing, and then accelerate your investments after you have built a base of knowledge and equity. It's not the only way to make millions in real estate...but it's the way that requires less money, has the least amount of risk, and induces the least amount of panic attacks.
We started out with $16,000. Thankfully my wife Julie was a saver. When she graduated from University and started working as a sales rep, she continued to live like a student. And, she put every extra penny she had into paying down her student loan. When that was paid off, she proceeded to save any extra money that she had. Her plan was to go back to school for her MBA so she wanted to have as much cash in the bank as possible to pay for school.
When I first met Julie, we had very different lifestyles. I was enjoying the money I was currently making. I went out a lot, drove a brand-new Volkswagen with financing, and had some credit card debt. I also had a piece of property that I owned with my mom. But when I met Julie she talked about retiring at 35. She spoke of it so clearly and had such a good plan, that I knew it could happen if I worked at it too.
It took a lot of work on my part to pay off my credit card debt, but I did it. I then started to save a few hundred dollars every month. But the reward was worth the work, and we started to shop for our first investment property.
Thankfully, we had Julie's savings to help us with our first purchase, but if you don't have enough in savings, don't worry. There are ways to buy property without money.
You may have heard of 'no money down' programs, and though they certainly exist and they can work, they're also very risky. Usually this is too much risk for an average person to handle, and why would you want to handle it anyway? Especially when there are three much less riskier ways to get into real estate investing:
1. Your own savings (cash out stocks, GICs, and even retirement savings in some cases)
2. Your home's equity
3. A partner with cash.
Here's the hard reality that you won't like to hear though. Finding a partner will be next to impossible if your own finances are ugly. If you have no experience investing in real estate, you are deep in debt and you are trying to get rich on my money, what exactly is in it for me, as your potential partner? It just sounds risky to me.
However, if you're in 'good debt' (like the kind that comes from student loans that you have been diligently paying down) and if you've done your research on real estate investing, then a partner starts to think differently about your debt. After all, you know how to control your money, so you won't waste his/her money. The potential partner feels that you can be trusted and that any risk to investing with you is slight.
See what I am saying? This person has no money, but they have the right mindset about money. They are in debt for a good reason AND have been diligent about debt repayment.
Before you can buy a single piece of property, you have to be able to control your own finances. This gives you control of your destiny. Living beneath your means is the only way to do that. If you're unsure about what you make versus what you spend, try this: for the next six months, keep track of every penny you spend. Once it's there in black and white you'll be able to see how you're living and where you can make changes.
I can imagine what you might be thinking - "but, Dave, I always spend a lot during the holiday season", or "we've been planning the trip to Europe for two years"! Don't fret- if you've saved up for those things, you deserve to do them. But, if you are going to end up going into debt for those things, you may have just discovered that you are a SPENDER, not a SAVER. If that is the case, you may not be ready to start growing your wealth and becoming a rich real estate investor. - 23229
About the Author:
Learn How to Retire with Real Estate with Dave's free Real Estate Investing Starter Tips Guide. Learn how to find money for real estate deals, create financial freedom, extra revenue and massive wealth with tips like: How to find quality investment properties, finding and keeping great tenants, and easy ways to make more money with real estate.
posted by X - Men @ 4:55 AM
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