949-392-1999
SHOW NOTES FOR EPISODE 323: HOW TO BECOME A REAL ESTATE INVESTOR FOR ONLY $500
How much money does it really take to become a real estate investor? $500? $5,000? $50,000? Or, does the amount of money even matter if there is no motivation? Too often, we use the money issue as an excuse for inaction. In this podcast, Bill addresses the motivation issue as well as sharing multiple strategies a newbie real estate investor can pursue today that requires $500 or less.
I get questions all the time on how much money it takes to become a real estate investor. And, the most accurate answer is really another question: “How motivated are you?” Because if you are motivated it really doesn’t even matter how much money you have or if you have no money at all. The real issue is motivation.
If you are too fearful or too lazy, it doesn’t matter if you have five dollars or five million dollars. You need to be willing to take action!
For example, if I find a person who has a house that they just want to get rid of as soon as possible and they are willing to let me find a buyer for the house, they can assign a contract to me that allows me to be the middleman, so to speak, without being a Realtor, to find a buyer, mark-up the cost so I can make a little money on the deal, and get the buyer to buy the home directly from the seller at the price I gave the buyer.
This is called wholesaling.
Or, if I can also find a rental property that the seller is willing to finance and carry back 100% of the purchase price — it will cost me nothing to acquire the property, outside of maybe some legal filing fees. Then, I can find a renter, have them sign a lease and have the renter pay the monthly mortgage (and a monthly profit to me) and I will not have to pay anything out-of-pocket to become a property owner and landlord.
That’s seller financing
That’s just two examples of how people can become real estate investors with little or no money required.
But did you know you can also do other creative things for $500 or less?
Now, I could have picked any amount but I think $500 is a workable amount that most people can access.
For example, with $500, you could purchase some business cards, set up a website and call yourself a real estate investor. But does that really make you a real estate investor? Well, some may not agree with me but I would have to say “no” because I think a real estate investor is someone who has actually invested in real estate and generates a profit.
I’m pretty confident that if you came to me with $500 to invest in real estate that I could show you how to turn that $500 into more money by investing in real estate.
This reminds me of an exercise I performed, to teach them about the rudimentary aspect of how a business works, with my own kids and even the kids in our orphanage in Haiti who were part of a vocational training and business program we called the Transition Program.
In a country with 80% unemployment (at the time), even with multiple college degrees, there’s no guarantee you will be able to work. You are going to have to learn to sell something or your services/skills to survive. But we wanted them to not just survive but to thrive! To master a business, grow it and use it as a catalyst to you and your family’s well-being.
We established a business incubator of sorts where we created actual businesses – Jewelry making, a bakery, welding, furniture making, silk screening, sewing and technology where we taught Microsoft Office skills, web design and Internet commerce.
In this exercise, I gave them $5 and I said that I wanted them to come back to me the next day to see how they could grew that $5 into more than $5. The kids were always super competitive and jumped out of the meeting ready to “make a killing.” It was always a blast to see what they would do.
- The most common – buy a box of brownie or cookie mix and sell the baked goods. Get the box, eggs, oil and would sometimes make $10-20 – that’s a great return 200-400% profit
- Some would make lemonade and get an even higher return
- Some would buy something that they would resell – clothing, soda, cheap perfume
- Some would make crafts or artwork
The exercise helped us to explain basic business fundamentals that we could build on as we taught them more about economic principles as well. The whole idea was to teach them enough so that when they actually entered the workforce, working for someone else, or launching their own business, they would have the basic skillsets to not such survive but to thrive!
Why am I sharing all this… Well, I think we need to use the same creativity when we look at real estate investing. If we have a limited amount to invest, we need to see that amount growing, learn how to leverage and make it grow even more.
I would love if someone listening would actually take $500 challenge, carefully track each step of your investment process, leveraging, etc. and one day write to be and say, “Hey Bill, I took your $500 challenge 5 years ago and now I have 1,000 apartment units worth $500 million.” And it all starting with just a $500 investment. OK, maybe I’m getting a little out of hand here but, hopefully, you get the point.
My daughter Francesca (whose going off to college in a few weeks – Whaaa) and she recently did this with $12 that she turned into $200 by buying cheap jewelry on Amazon. She was looking for a little business she could do in her free time while in school. It kinda fell apart however, as the jewelry was staining her customers necks – true story. Haha. But I liked her houtzpah! Just jumping in and doing it. Not afraid! She could make a good real estate investor one day!
I’ve had guests on the podcast that have done that:
Here a 9 Ways You Can Be a Real Estate Investor for $500 or Less
-
Bid4Assets.com – $1 minimum bid properties
-
Groundfloor – Invest in 50 different projects
-
Wholesaling
-
Seller Financing
-
Rent-to-Own or Lease Option
-
0% Down FHA, VA Loans, Hard Money
-
Assume a Loan
-
Government and Community Down Payment Grants
-
Take a potential partner to lunch
When I have guests on my Monday podcasts, I always ask them the question – “If they lost absolutely everything and only had $1,000 in cash. Knowing what they know today, how would they use that $1,000 to rebuild their real estate investing business. “
I can’t tell how many of my guests have said, “I don’t even need the $1,000.” Or they say, I would use the $1,000 to buy a cell phone and/or cover coffee or lunch meetings with people I know that would help me by providing funding.”
You see, the amount of money is not the real issue. It’s really what you would do with what little you have or the little you don’t have.
Be creative. Learn creative financing techniques and try them on your next deal.
OTHER REFERENCE BLOG/PODCASTS:
- Can People Really Buy Properties for No Money Down? – November 1, 2017
- 084: 10 Best Ways to Buy a Property with Little or No Money Down – March 17, 2017
- 021: Buying Properties with Little or No Money Down with Brandon Turner – August 8, 2016
- 221: Wholesaling Real Estate with Zero Cash – July 9, 2018
- 209: Buying Real Estate Without Cash or Loans – May 28, 2018
- 288: How to Find Below Market Properties in 2019 – March 1, 2019
- 210: 20 Best Ways to Find Off-Market Deals – June 1, 2018
- 200: Ask Bill! Buy Land and Retire Cheap, Real Estate Investing to Fund Minimalist Lifestyle and Travel – April 27, 2018
- 128: Where Can You Buy a House for $1,000? – August 18, 2017
DISCLAIMER: Many of the above strategies take knowledge and have a higher degree of risk. You need to do your research and/or work with someone who is experienced to reduce your risk.
IF YOU LIKED THIS PODCAST, we would love if you would go to iTunes, Stitcher, GooglePlay, iHeartRADIO and Spotify and Subscribe, Rate & Review our podcast. This will greatly help in sharing this podcast with others seeking to learn real estate investing as aCBRE means to achieve a successful retirement.
Check out our other podcasts at olddawgsreinetwork.com.
Get a FREE copy of our 3-Minute Rental Property Analyzer at olddawgsreinetwork.com.
Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com
