How can you send out thousands of mailers per month or purchase that cash-flowing buy-and-hold if you simply don’t have any extra cash? I’m all about mentorship, classes, books, and lots of the ways people pay for education—they can be amazing ways to scale your real estate career. But the fact is, some of us have to get started on a shoestring, and what’s beautiful about real estate is that that’s perfectly alright.
I’m not sure of many other careers where you can get started with zero dollars and make thousands within the month (I’m looking at you, wholesalers!), but real estate is definitely one of them. The free route may take a bit more time and a bit more grit, but you’ll be learning throughout the process. Ultimately, it’s get in or get out, and this is an industry that’s worth getting into.
If you have internet access and some social finesse, you can get started in no-money-down real estate investing right now.
Nearly every industry will say that you should network, right? But real estate is different, and I can’t emphasize it enough: networking is real estate. It’s not just an optional side dish. A contractor needs a hammer, a pilot needs a plane, and an investor needs a network.
Building a strong real estate network does two very important things:
- It shows you where the big players are buying and selling, what kinds of houses they’re after at what price points, and what direction investing is trending toward.
- It opens you up to other people’s deals. Maybe someone has their hands full and they just like your vibe, so they send a deal your way. Maybe someone needs help finding a buyer, so you JV on a wholesale, or maybe you find a team to partner with on an investment. The opportunities are endless. Sometimes, it can be hard to imagine what other people can bring to your real estate career, so stop trying to imagine it and just open yourself up to possibilities. Putting yourself out there can be the hardest but most important step in your investment career.
Start Building a Buyers List
Like networking, building a buyers list is 100% free. Your list should include individuals, companies, funds, etc. that are buying consistently. Do an internet search for buyers in your area, craft a well-written email or hop on the phone to ask if you can bring them deals, and be sure to find out what they’re after. (Never automatically add people to an email list unless they’ve okayed it, that’s just annoying.)
Facebook groups have been a huge boon to investors looking to build their lists, because all you have to do is create a post asking those looking for new properties to drop their email address in the comments section. You can use your own post to generate emails or search for others who’ve done it, and it’s copy/paste from there!
Other outlets where you can find emails include Craigslist, BriggerPockets forums, LinkedIn, ActiveRain, auctions, local REIAs, classified ads, other wholesale emails, bandit signs, agents, tax records, local lenders, etc. Get creative!
You may not have funds for marketing, but you can absolutely hit the pavement and the phone lines to find possible deals. Direct mail is cheap, but live conversation is free (and often more effective). Here’s a few ways to land something:
- Find numbers through sites like Craigslist’s f or rent and by-owner listings or even by getting in touch with other real estate-focused businesses, hen see if they’re looking to offload any properties.
- In hot cities like Atlanta, numerous wholesale LLCS own properties, and using the tax assessor’s site, you can see the LLC’s name (as the homeowner), then look them up. They’re obviously on the hunt for deals, and maybe they could use some help.
- On that same note, offer to be boots-on-the-ground for other investors. Using free online resources like the tax assessor's website, you can usually click on a property owner’s name to see how many other properties they own. Birddogging for a successful investor is a way to make yourself valuable while learning from a pro.
- Use skip tracing to connect phone numbers to distressed homes (think probate, code violations, and foreclosures)
- Drive for dollars! Leave cards or notes at distressed looking properties (just not in the mailbox—that’s illegal). Or, take down the address and try skiptracing to get them on the phone.
Once you have a buyers list and source a deal, you’re ready to wholesale, which costs nothing but time and can earn you thousands!
Joint Venture (JV)
As you get more experience and connections, you’ll be able to source deals and capital through private lenders and potential JV partners. If you’re looking for private lenders, begin identifying options early. It might take you bringing numerous options before they sign on, but if it’s a good deal, it shouldn’t be too difficult.
You can split profits with a lender lots of ways—there’s no cut-and-dried terms. Outline a contract that works for both you and the partner, and always be sure to have a lawyer check things out.
If you’re just starting out and it’s a renovation or flip, one option is to split profits 50/50, but you source the deal and run the whole project. Sure, you’ll put in more sweat and tears, but they had the money to make it happen at all. Once you do a few of these and have some savings, you can begin looking for cheaper lending options.
JVing on a wholesale or short sale can be easier, you simply take a referral fee (or finder’s fee) or write out profit-splitting terms in the contract based on whatever you negotiate with the representative.
Once you have a few good buyers, you can even source deals for them through other sellers (often wholesalers). Those sellers may not have the connections you’ve built (not everyone in your market is connected to each other), so you can use your network to leverage and create deals, creating a finder’s fee for yourself in the process.
At the end of the day, the more people you meet and the more time you spend in the field, the more opportunity there is to source deals, source capital, and do business. For some, it takes thinking outside the box, and for others, it’s simply about following in well-worn footsteps of others. There’s no right way to do it, but the important thing is that you do something. With time and educated effort, you will find deals!
I’d love to hear about your strategy for getting started in real estate with zero to very little money—leave a comment below!