Ways to Get Started

As in, right now!


I got cornered the other day at a get-together by a potential real estate investor. (Just tell someone that you're a real estate investor and watch how quickly you get cornered) It's repeated scenarios like this that convinced me to get into real estate asset management to begin with. The first notion that folks express to me is that they aren't rich or don't have a lot of cash handy with which to get started in real estate investing.

I smile inwardly when I hear that and immediately think of Bob Marley's admonition in his song Rat Race that "in the abundance of water, the fool is thirsty." Now, that's not to say that folks are fools- maybe less informed. In most cases, folks are grossly under-informed. This general lack of investment knowledge has led to a mentality best summed up as, "slave, save, retire." It's a perfectly safe thought process for life. However, it's also aggregiously self-limiting. Marley is correct, there's water (capital) around you to get started, you just don't realize it as such.

  • If you have at least $150 in your pocket, then you have enough to get started.

  • If you have a 401k from your previous employer, then you have enough to get started.

  • If you have friends with good credit, then you have dear friends that can benefit from your hustle. There's water around you, it only requires knowledge and creativity to tap the oasis.

  • With $150, you get a "fixer upper" under contract and the sell the contract (known as assignment) to a "fixer 'n flipper" for a fee of $2.5k-$5k (known as an assignment fee).

  • With a 401k from a previous or current employer, you can roll it over into a solo 401k (it's solo because you attach it to a LLC owned by you or you and your spouse) and use the balance to lend to your business for down payment money. You repay the amount, plus 5% interest, and your retirement grows. Plus, you've established a nice little piggy bank to draw from.

  • With a more established friend, you can present them with projects and use their money as down payment money. Meanwhile you carry the monthly note and expenses, and manage the fix 'n flip part, then split the the profit with them 50/50. It's more money than you had in the beginning, plus they got you in, which is the important part.

Heck, you can even combine concepts mentioned above. There are some assignment deals that require more earnest money than you can currently afford. That's where you can get the earnest money from a more established friend and split the assignment fee after the deal is done. Again, the end result is that you had more money than you did before, plus you're building a reputation as a money maker. That's a great thing!

So, look around you and learn to spot the value in the un-obvious oases!