Best Strategies for Today - Posted by Mark

Posted by Chris in FL on July 08, 2011 at 10:17:26:


I just found a guy with money looking for a good, safe rate of return… A guy like any of a million other guys that are out there right now. At some point, a little further down the road, there is a fair chance I will be that guy, looking for some budding young go-getter RE investor that will give me good, safe returns, with no buy/sell/ownership hassles on my part. It was nobody that I knew previously.

Ended up this guy lived in my subdivision, and called me off my bandit sign. I had put the same type of sign up for over a year, and he was always interested, but it took a year of persistence for his situation to be right, for him to finally pick up the phone and call me.

Interestly, I read books and talked to people about building wealth, and I was always seeking the answer to the question “what is the best way for me to do it?” I would get so frustrated, because people seemed to evade telling me. Now that I have done it (for the most part), I realize doing it is the only way I could possibly understand it… No one can tell you what is the one best way for you to build wealth, find your private lender, protect your assets, etc. Each of us travels our own path, and we can share insights, but what works for one may not work for another… We all come with different backgrounds, relationships, networks (or lack thereof), personalities, etc., and we each have to find what works for us. We each have to find our own niche, where we can be excellent at what we do. I am very content owning and managing properties… Compared with any other job I know of, I love doing it. I have a friend that absolutely hated dealing with tenants, but he has become very successful at building wealth through rehabbing and retailing houses (not to survive, like many rehabbers do, but to really get ahead financially). Another friend loves being a wheeler-dealer… He owns an electrician company, wholesales a bunch, rehabs a few, and keeps a few too, very successfully. He couldn’t possibly do only one thing like landlording or rehabbing - he would burn out and quit from boredom. He loves the action. I worked full time and did real estate full time as well for many years, and at that time in my life it was the right thing for me. Now, with no job except RE investing, and at 42 years old, I am cutting back more and more below even a 40 hour week because 1) my finances permit it, 2) I want to enjoy life more - do things before I get too old, and 3) I want to really know my two boys, and be a part of who they are and what they do every day. Even for the same person, different things work at different times. From 1998 to 2005 or so, bargains were hard to find in my area - that took extra effort… My best deals were fixer uppers, and I did a lot of fixing myself. Today, I can buy bargain houses needing a lot less work, and hire out most of it, because the market has changed, and I have changed. Now my challenge is finding the money - that takes the effort. Even with one private lender, I still consistently look for more - I don’t know when something may change with my guy, plus I would like a longer term (my guy is an older gentleman, and won’t do over 7.5 years).

Anyhow, my where or who may let you know it can happen… But if you need a private lender, to find a where or who of your own, you need to persistently explore every possible avenue until you find the one that works for you. It might take a day, a month, a year, or a few years. But, just like any other goal, if you make good plans, and consistently pursue them every day, eventually it will happen for you. Problem is, I have a bunch of investors from my REIA ask me how I am doing it, or how I did it, but almost none of them are putting in the effort necessary to do it themselves. They want to drink the milk, but they don’t want to milk the cow first! Good luck, Woody.

Best wishes,
Chris in FL

Best Strategies for Today - Posted by Mark

Posted by Mark on July 05, 2011 at 24:19:34:

What REI technique’s do most of you view as the best for today’s climate for someone with little or no cash and no credit? I know what worked as a strategy a few years ago may not work today.

Re: Best Strategies for Today - Posted by Chris in FL

Posted by Chris in FL on July 06, 2011 at 17:54:48:

Easy way to get started: find great deals and wholesale them - the art of finding great deals will serve you well throughout your RE investing career.

However, I think we are in a perfect market for buy and hold… How with no money? 1) Find private money - someone willing to fund great deals if you show them that you know what you are doing, and they will be well rewarded. 2) Partner with someone who has the money, and you find the deals and manage the properties. 3) Find owner financing, buy subject to existing financing, or lease option.

Bit of advice - if you don’t know what you are doing, the first thing you need to do is learn. As Sailor says, what are you bringing to the table? Determination, hunting for deals, etc. is great, but you also need to know what you are doing - how to find bargains, structure deals, create win-win arrangements, etc. The more you know, the easier it will get to do RE without money (or with money as well).

Best wishes,
Chris in FL

Re: Best Strategies for Today - Posted by Marko Rubel

Posted by Marko Rubel on July 06, 2011 at 10:12:23:

Hi Mark,

I would agree with Larry’s post. Go ahead and start learning
LOs, then start calling ads for rent and find a tired landlord who
will let you LO their house.

Here’s something IMPORTANT! Don’t let the lack of funds or
credit stop you! I had none when I started and the truth of the
matter is that you’ll become a better investor (read more
creative) if you have none.

There are plenty of strategies that don’t require any money or
credit to do. Here’s an example…

I just helped one of my students in FL finalize her first deal:

Purchased for $115k - “sub2” the existing loan - didn’t use her
Sold on a Wrap for 160k and collected 20% downpayment.
She has a nice cash flow and a big back end.

So can you succeed and make a killing starting from wherever
you are right now? ABSOLUTELY!

First step - read all the “How to Articles” from this website!

Take care,
P.S. back in 97’ when I started, I printed all of those articles,
sorted them in a 3 ring binder and highlighted them all :slight_smile:

Re: Best Strategies for Today - Posted by Larry Hoffman

Posted by Larry Hoffman on July 06, 2011 at 07:17:27:

Hey Mark,

If you don’t have any money then I would suggest a couple of strategies:

1.) Become a bird dog for another re investor and then work your way up where you are negotiating the contracts and then assign your contract for a fee (I tried this several years ago and had a hard time due to greedy investors wanting me to lower my assignment fee, yeah right!)

2.) Flip lease options. I still use this strategy today. I stumbled on this technique about 14 - 15 years ago while trying to sell a sandwich leas option. You basically assign your lease option contract to your tenant/buyer for a fee. This is usually the no refundable option money that is put down. I usually keep the entire down payment, sometimes I split it with the seller 50/50.

I try to have all my lease options go through my attorney. We have a formal closing in sorts. All payments go through him. I have all documents signed and held in escrow from the seller. So when the tenant/buyer is ready to buy they call the attorney and between the two of them they coordinate the closing date. I ask the tenant/buyer to make all monies payable to my attorney.

A long time ago I was doing a sandwich lease option where the tenant was paying me and in turn I was paying the seller. The seller wasn’t paying the mortgage, he was going to the boat to gamble it.I got a call from the tenant/buyer saying they were being foreclosed on. I had to come out of pocket to fix it and then when I decided to have everything go through an attorney.

Hope this helps get you started in the right direction.


Re: Best Strategies for Today - Posted by ari

Posted by ari on July 05, 2011 at 11:53:22:

If you have no money, you cannot purchase. Unless you can find a seller that will carry back the financing with zero down, you are out of luck. If you can put at least 20% down, you’ll be far better off anyway.

Re: Best Strategies for Today - Posted by phil fernandez

Posted by phil fernandez on July 05, 2011 at 08:05:52:

Cash flow is king.

Re: Best Strategies for Today - Posted by brandon

Posted by brandon on July 05, 2011 at 07:26:15:

Buy and hold for cashflow…NOT appreciation.

Re: Best Strategies for Today - Posted by Sailor

Posted by Sailor on July 05, 2011 at 07:17:27:

What ARE you bringing to the table?


Re: Best Strategies for Today - Posted by Woody

Posted by Woody on July 07, 2011 at 19:23:20:


How did you find your private lender again? That seems to be the key for you.

Re: Best Strategies for Today - Posted by Lee

Posted by Lee on July 07, 2011 at 13:53:06:

Great Information Guys! Thanks for helping us!!

Hey Marko…when you say “call ads for rent and tirelandlords who wil let you LO their house”…do you recommend doing LO Flip or Sandwich lease?

Do you tell the sellers that “you” will LO their house or that you have T/B that will actually live in their house?

I’ve been contacting many sellers from Craiglist but no one seemed interested in doing a LO. I did find two sellers out of 100 that would do a LO, but they wanted $20k down payment.

It appears to me from my experience that Craigslist is not a good soucrce to find sellers willing to creative terms. Any thoughts on how to find them and approach to complete LO deals?

Thanks All!

Re: Best Strategies for Today - Posted by Chris in FL

Posted by Chris in FL on July 08, 2011 at 01:24:28:


Agreed… In this environment, that is key for me.
Ten years ago, my key was bank financing rentals, especially with HELOCs.
Before that, it was a needle in a haystack search for bargains, and learning how to manage property. Different environments require different keys - learn, adapt, persist, overcome!

I think finding a private lender is very individual… Might be a current family member, friend, or business acquaintance. Might be connections in a civic or service organization. Might be through a REIA. Might be asking everyone you come across how their investments are doing, and if earning a better interest rate safely would interest them. Personally, I was able to let people know that I had over 10 years successful experience owning and managing rentals, never a day late or a dollar short with any payment ever (credit report for proof), and I offered to let them look at several houses I owned free and clear, determine what they thought they were worth, and let me know how much they were comfortable loaning against whatever one they liked the best. Offer that to enough people, long enough, and eventually someone says yes. It took me over a year of consistent effort to find the right private lender, but now we have a great relationship where we have done 11 mortgages together, and counting. The important questions are what is your key, how will you find it, and when will now be the right time for you to start that search?

Best wishes,
Chris in FL

Re: Best Strategies for Today - Posted by Marko Rubel

Posted by Marko Rubel on July 07, 2011 at 14:18:57:

Hey Lee… here are a few suggestions:

  1. I never tell the owner on the phone that I’ll LO their house
    bec it takes a little bit more rapport for that - I never lie, and
    you shouldn’t either bec you’ll lose the credibility later on.

Just say if they ask… “it depends”… and continue w questions.

On the phone you care only about 2 questions - Would you
consider a long term lease? Would you be willing to sell the
property at the end of the lease term?

If they say yes, schedule an appointment. And after you build
the rapport, introduce your “services” and tell them how you can
help them. I suggest you don’t say you’re an investor - there
are a lot of reasons for that but can’t go into it here… too much
typing :slight_smile:

  1. ads - try “aging” ads – look for ads old 3 weeks - so many
    will be sold/rented, but those that are not are more likely to be

  2. Assigning/Flipping LO is fine, but I am not too excited about
    it bec in fact the owner will have to deal with them later, which
    means you’ll have to get the owner to agree. I prefer long term
    Sandwich LO - imagine this (think big) if you can lock up 20
    properties on 7 years LO - in 7y they will double - and you
    made some serious money. The risk is so small bec if you do it
    properly you will always collect enough to cover all possible
    issues and some.

  3. to get some to go, I would offer 3 or 6 mo. prepaid rent -
    thats better than giving them option money - bec you get it all
    back quickly.

Hope this helps,

Take care, learn and be persistent!

Re: Best Strategies for Today - Posted by Woody

Posted by Woody on July 08, 2011 at 09:00:47:

Thanks for the how, but where or who did you eventualy find as a private lender?

Re: Best Strategies for Today - Posted by Lee

Posted by Lee on September 07, 2011 at 15:06:40:

Hi Marko,

Hey with this sandwich LO strategy, you mentioned a 7 year LO term, what do you do if the owner/seller wants the sales price of the property to be the market price at the end of the 7 yr term.

Some owners/seller said they may agree to LO but they do not agree on today’s market value price…they want the market value price of the property at the end of the lease term. They think the property will appreciate and be higher in value at the end of the lease term. Do you tell them you will get them full price and just give them a portion of the profit at the end of the lease? Thanks.

Re: Best Strategies for Today - Posted by Lee

Posted by Lee on July 07, 2011 at 18:10:16:

Thanks Marko!! You Rock!!!