HOW DO YOU BUY A HOME WITH NO MONEY DOWN AND BAD CREDIT AND BE COME A REAL ESTATE INVESTER?

Asked by Pat, Elk Grove, CA Mon Aug 24, 2009

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17
Jesse Sierra, Agent, Pomona, CA
Mon Aug 24, 2009
Pat,
If you don't have any money for a downpayment and bad credit it's not going to happen. That is the plain truth.
Get your real estate license in California. Then you can help investors purchase fixer uppers. Rehab them, and put them back on the market for individuals with decent credit and 3.5% down (FHA Financing) can purchase them.

Save your money from the commissions, then you can buy, rehab and list them.
Do not buy any get rich schemes on the internet, go to Barnes and Nobles, Borders or any bookstore near by and buy a book on real estate investing, that way you can get an idea.
If reading is not your thing, again it's not going to happen.
Pat you need to have dedication, I did the real estate course and exam in 3 months (Real Estate Principles, Real Estate Practice and California Real Estate exam).

You have to be a license agent to buy and sell in California, no matter what get rich schemes say.


@ Dunes,
You always put a smile on my face with your answers. =) (Tough Love)
If we don't have dreams or goals, we will not be living, just existing.

There is no easy way to make a bunch of money, unless it is illegal,

Jes Sierra, B.Sc.
Realtor®
1 vote
Sue Archer R…, Agent, Palm Harbor, FL
Mon Aug 24, 2009
Everyone has to start at the beginning, no matter who they are. (Even Trump worked under his father to learn the business). Get some books on real estate investing (not for the quick buck, but how the market works). Join an investor group. Partner and be a lackey for some people that have funds and need someone to do the legwork in finding the deals.

And while you're doing that, improve your credit so that eventually, when you have a few bucks to invest yourself, you also have access to some loans to help you leverage in your investments. THAT's how you do it.
Web Reference:  http://www.suearcher.com
1 vote
Voices Member, , Benton County, OR
Mon Aug 24, 2009
Go to Rite-Aid (Electronics) next to the Warp drive engine crystals and you'll find the Wayback Time Machine.

Purchase it, do not try to shoplift it as they are rather hefty, take it home and assemble it. (Instructions are provided in three languages) Once assembled set the year (The knob dohicky with numbers) to 2004 or 5.
Buy away...........................Tell everyone you are a Real Estate Investor and prices will always go up..Write book...Do infomercials in front of a big boat drinking something that has a small umbrella in it.....
Be appointed to an Economic Advisory position by President..Write second book

Return here in 2009 to post your question "Can I buy a new property then let the one I currently own be foreclosed on."

Everyone has to start somewhere Pat, you might try starting with fixing the "Bad Credit" while you save for a "Down Payment"
1 vote
Mack McCoy, Agent, Seattle, WA
Sun Dec 27, 2009
If you don't have money, cannot be an investor. Investors have money.
0 votes
, ,
Sun Dec 27, 2009
A few years ago I called a phone number listed on a hand written road side sign in my area which stated -
" Real estate investor needed, blah blah blah, make $20k per month!".....long story short, the entity behind the scenes was Noveau Riche, a real estate based multi level marketing company.... the product was essentially real estate education, selling either modules and class room eduational credits.....I presume the $20k I was going to make was by getting thousands of my friends to sign on below me, providing my income stream! .....I've never been a fan of MLMs so I didn't pursue this 'opportunity' any further......

I didn't see anyone draw this reference to becoming a real estate investor...

best, Jeff M
0 votes
Chris Sorens…, Other Pro, Temecula, CA
Wed Aug 26, 2009
Jim, I agree. RDPD and books like it, taught the average consumer how to justify that which didn't make sense for the long term.
IMHO, its part and parcel as to why I am now paid by government agencies to unwind what this movement of, buy now and pay later created.
I stand by my earlier post. I've seen first hand what local investors can do and what they will lend on and it has everything to do with the property and little to do with the borrower. Ive seen first hand people go to the Recorders office, pull the NOT's and/or work with a friendly Realtor and write75 to 100 "Letters of Intent"." By doing so they were able to narrow their search and find a home that made sense to buy. Once you do all this and can demonstrate your research, short term money is easy to find and plentiful, regardless of ones credit. Again, its not easy. One of my friends inspect 50 homes a week to make offers on 2! No thanks!! Not for me, LOL! I'm proud of him and he's doing well, but its not for me.
I teach and I read a lot, so I agree one can never read enough. However, based on the original question, I believe the best advice is to get out there and do it. The one he really needs to hear from is the guy lending him the money, not the author of a book. Although, Bruce Norris is an author and he's the lender!!! http://thenorrisgroup.com/
0 votes
Jim Walker, Agent, Carmichael, CA
Wed Aug 26, 2009
Rich Dad, Poor Dad "It was never intended to be used as a financial textbook"

But it is touted (promoted, sold) as if it were. I agree that people should educate themselves about business principles and economics, just as I believe they should become knowledgeable about their health care options.
But teaching people that assets are liabilities and teaching them that credits are debits is plainly 180 degrees opposite from telling the truth. You can argue with the cows until they come home, but if you argue against facts you lose credibility. Kiyosaki does not contribute to financial literacy, he promotes financial illiteracy with his distortions.

Kiyosaki is successful because he lies, not despite the lies. He would not be on the best seller list if he published a sensible guide to managing money. A corollary in the current political debate is that rational analysis of the health care bills is ignored while we hear fantasies about government death panels and forced abortions.

Gullible people often prefer lies over truth. But that doesn't mean we should simply give them what they want. Would you give a sugary soda to a diabetic child? No. You wouldn't.

We often hear in the defense of crazy positions, that there is some kernel of truth in the claim, even if the claim is way off the mark. The problem I have with that, is that people can't and won't read everything by everybody and come to their own conclusions. Instead they will start down a path of inquiry, and be led from their starting point. If Kiyosaki is a starting point, then the reader is led astray from the beginning {with his (your words): trivia and madness}. It becomes more difficult to learn when you must first unlearn previously consumed disinformation.

At your request, HHI, I "agree to disagree" I stipulate, however, that this does not give the opinions equal value.
My criticism of Kiyosaki remains intact, while your defense of RDPD concedes that my criticism was correct, but also overly shrill and harsh.

I chose to be harsh because I acknowledge I am in the minority. Thus I chose to overweight my minority opinion with hyperbole. Most people who have been exposed to Kiyosaki think he genuinely has valuable advice on offer. More is the pity.
0 votes
Leasing To O…, , Dallas, TX
Wed Aug 26, 2009
Jim......
You are definitely entitled to your opinion about Mr. Kiyosaki. As usual, John T. Reed's name usually comes up. Here is Mr. Kiyosaki's response.

http://www.mastermindforum.com/kiyosakiresponsetoreed.htm

Each person is entitled to their own opinion. Do I believe EVERYTHING that he says....of course not. Not everyone likes RK or his ways of "twisting financial definitions" or his thinking/educating. Just as some people do not like John T. Reed techniques. We will have to agree to disagree.

And as far as your definitions, yes....by definition a house has value, so accountants and bankers will call it an asset. You are looking at it from a cash value point of view, while Robert looks at it from a Cashflow point of view. That can be argued till the cows come home. And, as far as the bad debt terminology, maybe it would be "nicer" for me to say...Quit spending you're money on frivolous items and stupid stuff. Better? People who have a problem with his "redefining terms" have sadly missed the point of the book. It was never intended to be used as a financial textbook at the Wharton School of Business. It was to get you to think.

Is it wrong to tell people that they need to educate themselves when it comes to money matters? Or that we need to teach kids more about how money works? If FOX, CNN, CNBC, MSNBC, and people like Donald Trump, "The Real Estate Guys", along with countless others, believe in some of Mr. Kiyosaki's principles, then maybe...........just maybe, there is some merit to his madness.

All I was saying is for people to develop their own base of knowledge and become financially literate. Read everything from everyone and make your own opinions. Do I know if Pat would prefer to get her CA license to gain that knowledge, or whether she'd prefer to network and work with other Investors/Mentors? Did I say that Pat has to read AND absolutely LOVE the Rich Dad/Poor Dad book? Nope. She may think it is too non-specific and trivial. That is up to her to decide. Just as I did and you did.

Darin
Web Reference:  http://www.hhiinvesting.com
0 votes
Jim Walker, Agent, Carmichael, CA
Tue Aug 25, 2009
Debbie Rose, HHI,

I like those expressions you cornballs use, willy nilly.

Here are some of my expressions directed at Bob Kiyosaki: Bunk and Hoodwink. (more at the end of the rant)

IMAO, the HHI advice to read Robert Kiyosaki is in error. Kiyosaki is a big fat fraud. He is a mis-educator, Kiyosaki's wealth comes from selling his books, tapes, seminars, etc. Not so much from real estate investing and sales.

- He "educates" by giving his own definitions to phrases that are just plain wrong. Example from below: Bad Debt is defined as credit card debt.
Wrong. Bad debt is debt that the creditor will not be receiving. A borrow can have bad credit, but he does not own bad debt.

If you have a high interest credit card balance, you do NOT have bad debt. You do not owe a bad debt.

If you refuse to pay that card. The card issuer will own a bad debt, and you will have bad credit.
You would owe (not own, or have) a bad debt.

If you loan someone money and they don't pay YOU. Then you have (as in own) a bad debt.

Kiyosaki delights in twisting financial definitions for novelty's sake, Using the words "have" and "has" which imply ownership to describe conditions which are the opposite. The ruse works because otherwise knowledgeable supporters of his (HHI) let him get away with giving bad definitions.

Another of his goofs is that he calls the ownership of a home a liability. Completely false. The mortgage on a home is a liability. The property taxes are liabilities, the insurance bill, the maintenance and utility costs are liabilities. The house itself, in direct contradiction to Kiyosaki's preachings is a freaking ASSET!

Kiyosaki = hornswoggle, flapdoodle, piddle-paddle, fiddle-faddle pilfery


The link below is to an interesting analysis of Kiyosaki by John T. Reed
0 votes
Jesse Sierra, Agent, Pomona, CA
Tue Aug 25, 2009
@ Darin,
"Get your real estate license in California. Then you can help investors purchase fixer uppers."

Pat doesn't have any real estate knowledge or skills regarding real estate practices.

Not to bring Pat down or anything, would you fund Pat and have her go out and buy and rehab properties for you and wholesale them for you?

I wouldn't, neither would investors.

You don't need a license to sell your own properties, but if Pat wants to buy and sell properties she will need to get a real estate license. Or have her family members pitch in go to visit auction homes, take notes of what needs to be repaired, get comps from a Realtor® and bid on foreclosed homes. Fix 'em and flippum'.

By the way here is a link Pat: http://www.auction.com

I have represented investor's at the repo auction and most of the properties you can't even get if you have the winning bid, because the banks, trusts or sellers have a reserve on them.
BTW Darin, awesome info, I will look into the teacher you mentioned, when I'm sitting at open houses (LOL).

All I'm saying is that Pat should try to get her RE license, get into the RE profession, aquire some knowledge, clients and funds. So she can invest and secure her retirement (which is why she is thinking about becoming a real estate investor).

I'm ranting now, ain't I............

js
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Mon Aug 24, 2009
Yes, Darin, to answer your question.............. people like me say "willy-nilly' .....and "tad" ( I also say "hence" - I am a dork)!
0 votes
Leasing To O…, , Dallas, TX
Mon Aug 24, 2009
Mr. Jes Sierra has some good points especially about NOT buying every "get rich fast" item you see on TV. There are wayyyyy to many other (less expensive) ways to learn like the Barnes & Nobles he mentioned.

I do have to respectively disagree when he says that... "You have to be a license agent to buy and sell in California, no matter what get rich schemes say." That would mean that there are NO houses sold or bought in the entire state of California unless a Real Estate Agent is involved. Every single person in the State of California would have to get their real estate license just to sell or buy a house.

I personally know many Investors, who do deals in California, that do not have a Real Estate License. If you feel the need to work for other people (a Broker) then great! Get your license. But.....I bet if you go to one of those REIA meetings (Real Estate Investor Associations) that you will find someone who does not have or need a license.

Darin
Web Reference:  http://www.hhiinvesting.com
0 votes
Leasing To O…, , Dallas, TX
Mon Aug 24, 2009
Hey there Pat,

There are a few ways to acquire a house with little to no money out of your pocket and bad credit. The first thing to do however, is to EDUCATE YOURSELF. The last thing you want to do is jump into something willy-nilly (Do people even say that anymore?) without knowing the entire process.

I completely agree with Ms. Sue Archer. Join your local REIA, get a mentor whom you can work under and learn from, take some classes and seminars (just not the ones that are too pricey...start small), start playing the game "CashFlow 101" by Robert Kiyosaki, go onto forums such as http://www.reiclub.com to share questions and ideas, listen to Real Estate Investing Podcasts such as "The Real Estate Guys Radio Show" and "Get Real...Real Estate Investing for the Rest of Us" = (BOTH OF WHICH ARE FREE IF YOU HAVE iTunes), start watching Dave Ramsey on TV, and read...read....read many different books by different Real Estate Investors. And........for any of those so called Gurus on TV who say that it's easy....I beg to differ. I've worked my tail off and I've sacrificed more than I every could have imagined to learn what I've learned.

Develop you own base of knowledge and become financially literate. A good foundation of how real estate Investing works is paramount. Couple that with the ability to be a financially sound individual (eliminate bad debt such as credit cards and wasteful spending...etc) and you have a powerful combination. Being a Real Estate Investor is just as much about knowing which deals NOT TO DO, as it is finding the quality "No Money Down" deals. You end up maximizing profits and deals by education. The more exit strategies you are able to master and employ, the more deals you can create.

In a nutshell the keys are:
1. Become Financially Literate
2. Work to Learn
3. Find Mentors, build a quality team around you
4. Work for yourself
5. Create Money
6. Give Back

In my opinion, some of the better teachers/educators out there are as follows:
Unequivocally..... Bob Bruss - the late great real estate columinist who covered many topics. LOVE HIM!
Wendy Patton - Broker and Real Estate Investor
Robert Kiyosaki - You HAVE TO read Rich Dad/Poor Dad and he has many other books.
William Bronchick - Attorney and Real Estate Investor
Claude Diamond - Lease Purchase specialist and Mentor to MY Mentor
Andy Heller - overall good guy and Real Estate Investor

If you couldn't tell, Real Estate Investing is a passion of mine. I read every article and tid-bit I can. I'm a sponge for both the good and the bad points of Investing and I constantly seek to learn.

I may have rambled just a "tad" too much, but like I said....It's a passion of mine and I have a long road of success and hard work ahead of me. Maybe you do to.

Best of Luck

Darin
Web Reference:  http://www.hhiinvesting.com
0 votes
Chris Sorens…, Other Pro, Temecula, CA
Mon Aug 24, 2009
Find homes with a NOT (Notice of Trustee Sale) filed against them, look for ones with plenty of deferred maintenance, show up at the court steps with your list of homes and documentation demonstrating that you have done your market research. If you can demonstrate that the home can be purchased back of value, investors will lend you, typically 60 to 65% of market value. The terms are usually 12 to 13% interest for 2 to 3 points and good for 1 year. This money will allow you to buy, fix up and pay a commission to sell this home. I have a few friends that do this full time and have used this type of financing until they have made enough to fund their own deals.
It's a lot of work and competitive, but I'm sure you can do it if you are committed.
Do not misunderstand, you will not necessarily have them loan you money on the spot, but your looking for a relationship. The investors will want to see that you are willing to do all the needed leg work and market research. If your work is sound, then I assure you that there are investors who will lend you money.

Since you didn't say you were looking for owner occupied financing, I'm assuming this is the information you were looking for. Don't let anyone ever tell you that you can't do something! Go get em!
If you wish to track me down through Trulia, I will give you a contact who does this type of lending.
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Mon Aug 24, 2009
Call me a cynic, but I think this quesrtion is a bit tongue in cheek (maybe more than just a bit).....in any event I shall add my wisdom to the pile (don't ask ...pile of what!).

I got attacked once here for suggesting that anyone with bad credit, no down payent and no savings, should not be buying a home. That's right - a Realtor who says rent, don;'t buy!
Even if there is some creative ( or ridiculous) program out there that could get you into a home, don't do it..............pay your rent , pay your bills on time and try saving some money.
0 votes
, ,
Mon Aug 24, 2009
Hi Pat
I have to agree with Micki there. Not only are $0 down loans in extremely short supply these days, you need to have decent credit and the home has to be owner occupied to qualify.

If it's an investment property you are probably going to need at least 20% down and a minimum credit score of around 680.

Work on boosting your credit and saving some money up for a down payment
0 votes
Micki O'Toole, Other Pro, Corona, CA
Mon Aug 24, 2009
Pat,
I don't know how serious your question is, but unfortunately a lot of late night informercials may lead some people to believe that they can in fact buy property this way. Sadly, I have never seen it happen and it is disheartening to see people taken advantage of in this way.


All my best,
Micki
0 votes
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