No money, no income, how do I get started in Real Estate?

[Tibor]

Hi Captain of the Enterprise and other contributors,

I'd like to point out as single sentence in Dolf de Roos's book
in the Preface where he writes

I have never had a job.

Very interesting reading. For those who have not been acquanted
to him, strongly recommended.

I guess you have 2 options,

1. Feel hopeless and lost and whatever and do NOTHING. My best guess in 10 years time it will be more or less the same.

2. Look at as an opportunity. Your assignment is (to use your brain more than the average punter) to find a property where you can negotiate a long term settlement and access to the property during that period of time, renovate it on a very low budget and get it appraised so it will be cash-flow positive, under 75% LVR (no cash reqd), good broker for a low doc loan.

By the time you've achieved this, you'll be more of an expert than several people who already own (maybe even multiple properties). You just learned how to make money out of alost nothing! Having lost of equity and reasonable job / salary makes it much easier, but not smarter.

Should you be willing to take up the challenge it will take you where no (t many) man (woman, who cares about the sex) went before.

Awaiting your response eagerly,

Tibor

 

[michaelg]

Hi,

This is just theory for me, but you have to ask yourself, "what would you do if you stumbled across an incredible deal, once that you just had to get into no matter what, but couldn't what would you do?"

This is what you what, a deal which you have come across before anyone else, which has a load of equity in it, etc, etc.

What would you do?

I don't know, maybe release broad snippets of info, value, buy price, what you want (I want % of equity after 5 years, I want immediate $$$, I what joint venture split). You wouldn't be acting as a bird-dog or buyers agent, but as an equity partner.

But, the problem is, you cannot make the offer publicly, otherwise you will break the financial services review act. You can only make the offer to people you already know or have had a prior business relationship with (how many people do you know?, your doctor, car workshop owner, etc, etc, there are many people in our lives we deal with)

Then maybe, if you were paranoid, offer prospective investors more info under a signed confidentially agreement (or non disclosure agreement) or what you felt would protect your asset (the information regarding the property).

With all the time on my hands, I would draft a neat offer document, showing realistic cashflow projections, what are the risks (yes you must be truthful about the possible risks), what protection they have, basically a business plan for each deal. There are plenty of business plan templates on the net.

They may be called no money down deals, but what it does cost you is time.

It may even be a selling point, "Hi this deal took two solid weeks of preparation to put together, on an average salary thats $x/hr x 35/hrs per week. apart from the cost of time, doing this deal means you are effectively leveraging your time"

Just a thought
Michael G

 

[hobgoblin]

Right on Tibor!!!

Always_, just to clarify.
My new job with QANTAS pays, um, $3.85 per hour. Don't ask! I have a long term plan in mind regarding this job.

As to my deposit, not one cent of that is my money. Even the lousy $1300 in purchasing costs is being financed! The deal with my finance partner was already in the pipeline, but after reading TaGR, I cemented EXACTLY what I wanted in my mind, and got him to agree to the deal on my terms! Before that he was talking about "maybe weeks down the track, after so-and-so happens, and more on HIS terms..."
Each time I talk to him, the deal is getting better and better! No sh**! I believe that is mostly because I have been implementing some practical tips from the book into my daily life.

Just to top it off, Centrelink has just cut me off completely! I now have no income whatsoever, until my QANTAS gig starts, and am madly racing through "The 7 habits of highly effective people" LOL!

It's all good - I DO so love a challenge!

Hobgob

PS: Did anyone see the thing about the single mum property millionaire on "A Current Affair" last night?

 

[gecho1]

no money down

tibor,
I am very interested in your second theory as I am in the same position at the moment, and did post some weeks ago in regards to a long settlment and building equity into the property.
i am a carpenter with over 12 years of hands on experience in all aspects of building and renovating. Very keen to hear from anyone who has gone through the process as mentioned by yourself.

regards

gecho

 

[investor]

Originally posted by Captain_Picard

The only hitch is that I have no money and no real income. Captain_Picard

Hi Captain Jean Luc Picard

I am very intrigued as to how you are about to "embark" into an "enterprise" known as IP investing and "go where no man has gone before " by aquiring land on this "3rd planet from the sun" without a secure position on your "starship" and without any "latinum" !!

I believe you should first "engage" your thoughts into finding a position with the "federation" and aquiring a supply of "latinum". Only then you may be able to leave "stationary orbit" with "impulse" and maybe even attempt "warp drive".

"Live long and prosper"

Investor

 

[always_learning]

Originally posted by hobgoblin
Right on Tibor!!!

Always_, just to clarify.
My new job with QANTAS pays, um, $3.85 per hour. Don't ask! I have a long term plan in mind regarding this job.

As to my deposit, not one cent of that is my money. Even the lousy $1300 in purchasing costs is being financed! The deal with my finance partner was already in the pipeline, but after reading TaGR, I cemented EXACTLY what I wanted in my mind, and got him to agree to the deal on my terms! Before that he was talking about "maybe weeks down the track, after so-and-so happens, and more on HIS terms..."
Each time I talk to him, the deal is getting better and better! No sh**! I believe that is mostly because I have been implementing some practical tips from the book into my daily life.

Just to top it off, Centrelink has just cut me off completely! I now have no income whatsoever, until my QANTAS gig starts, and am madly racing through "The 7 habits of highly effective people" LOL!

It's all good - I DO so love a challenge!

Hobgob

PS: Did anyone see the thing about the single mum property millionaire on "A Current Affair" last night?

Hobgob, how did you sell the idea to your finance partner? what does you finance partner get out of this exercise (the $9pw cashflow?), my memory of your purchase (congradulations BTW, I was 24 when I made my first purchase more than 3 years out of uni and 3 years of work) I would call a long term holding type investment. From memory your purchase was just cashflow positive, and future income growth depends on students ablility to pay which will track the natural growth of the economy. I am not being negative about the investment, only if I was your finance partner I would be saying "WhatsInItForMe".

 

[sbe]

Tibor,

It's a nice theory, but with a topic of no money, no income.... I'd like to see it done.

1) No-one will give you access to a house without a decent deposit - at least 5%

2) An agent wont even take a house off the market without a deposit - say $500

3) How are you going to renovate a house at all with no money, let alone enough to increase the value enough to end up with 75% equity? Even paint costs around $55 for 4 litres


Possible Solutions - Personal loan - Nope - no income remember....
Credit Card - Getting one on no income could be fun....mind you, they'd probably give you one anyway with a low limit, but how you going to make the payments?

You need at least some money to get the thing started.

Next Difficulty - it's VERY hard to get banks to loan on valuation, and not contractual value. I've heard of it done, but it's not easy.

I'm not saying this to stop anyone trying, just making sure you're all dealing in reality..... Think of ways around this and you can do something.

eg. Got any friends / family who'll help out for a % of the property or something?

You need money from somewhere - even if it's only in equity.

Unless you can find a vendor willing to let you do all this, which if you find them, let me know.... I've got this bridge........

Cheerio

Simon.

 

[Kevmeister]

It may be all well and good to sit around trying to strategise how you can get into property without having any money, and Dolf De Roos seems to think it's a great badge to wear ("I have never had a job"). Good on him.

And Hobbo seems to have got herself into some property by virtue of having an investing partner (I agree with AL in terms of "Whats In It For Me"). But perhaps not much cap growth (pegged to inflation?) so where does the wealth come from?

But there is often a saying that simple solutions are often the best. And the simple solution is to get a job.

 

[hobgoblin]

Hi Always,

Hobgob, how did you sell the idea to your finance partner? what does you finance partner get out of this exercise (the $9pw cashflow?) .....I am not being negative about the investment, only if I was your finance partner I would be saying "WhatsInItForMe".

Fair enough question. I don't want to go into intimate details about my finances, as I am not sure just who is lurking around on this forum (I'm sure you understand) but let me say this:

My partner gets half the rental income at 5.7% yield - plus my loan interest at 5.99%. Previously, he has had the cash sitting in a bank account earning normal savings account interest (virtually nothing). This guy is a very high income earner, but does not have much iniative when it comes to getting his money working for him. He is Mr Passive, as he doesn't want for much in life - he honestly LOVES his job, and lives exactly where he wants to live.... So, what does he get? He gets a hard little worker like me who has done the running around and put this deal together. He gets close to 6% return on his money, plus capital growth. He gets to own half a piece of inner Sydney real estate with little work on his behalf, and he gets to see his little buddy Hobbo live her dream of property ownership. Why would he want this last one especially? because he is a true friend, and an old fashioned gentleman who has everything he wants for himself, and loves to see others be happy. Wanky sounding I know, but true!

Captain Picard,

My point to you is this. If you are not lucky enough to already have a friend like my private financier, there is no reason you could not get one if you set your mind to it. That's what such books as "Think and grow rich" and "The magic of thinking big" are all about. What your mind can concieve and believe, you can achieve. Go for it! Try to use your current 'handicap' as an advantage. I would love to expand on this last point, but this post is already WAY too long....

 

[sbe]

Good on ya Kev !

It amazes me the lengths some people will go to avoiding the simplest answer....

Which poses the question...

Is there a valid reason The Captain can't go get a job and save a little??

 

[paulzag]

Folks I don't moderate heavily out of techno-anarchist philosophy.

a few points

1) a centrelink benefit does not imply unemployment benefits. Watch your assumptions, gang.

2) a job is not the only way to start investing. I started without a job and without savings (to speak of). That is an added incentive to work hard. Working hard does not require a job. Telling people to get a job without added input/analysis is a waste of bankdwidth.

3) IMHO (not moderating) getting a job is potentially dangerous to your long term wealth. Only you can work out if that is the case, but remember...

The enemy of the great life is the good life.

The world is full of highly paid S quadrant people.

 

[geoffw]

Hi Paul,

You've given a few interesting, but rather enigmatic resposes there.

Would you care to expand on that response a little please?

Thanks.

 

[investor]

Originally posted by paulzag
2) a job is not the only way to start investing. I started without a job and without savings (to speak of). That is an added incentive to work hard. Working hard does not require a job. Telling people to get a job without added input/analysis is a waste of bankdwidth.

3) IMHO (not moderating) getting a job is potentially dangerous to your long term wealth. Only you can work out if that is the case, but remember...

Hi Paul

Hmmm let me see now. You didn't have a job and yet you say you worked hard. Well then you had a job. Even being self employed is a job.

Well I'm fresh out of school or uni, I have 80 bucks in the bank because that's all I could save from Austudy, I'm still living at home because I can't afford rent in fact not even board because I have no income and my parents are pensioners so they can't help me at all as they are struggling themselves.

If you consider getting a job (working for myself or someone else) potentially dangerous to my long term wealth what do you consider I should do ?

Play the lotto ? ooops can't even do that

I'm interested to know what you would do in this situation, as I would like to leave work(self employed) myself and spend more time on the beach but........

Regards

Investor

 

[always_learning]

If you have nothing, are hungry, dont have a home or even a pot to p.ss in, then I strongly recommend getting a JOB! Just call me a right wing loony!

Having a JOB, is 100 times better waking up hungry in a gutter!

 

[Aceyducey]

I'm with Paul.

Most people work for a living. They sell their bodies & minds to an employer in return for a wage which has little or no relationship to the actual wealth they are creating for the employer.

People in this boat often are risk-intolerant, are used to having a BIG support net and often are afraid of losing their jobs because they are unclear on how to generate wealth through other means (until they reach the pension/retire on their super).

This is called the employee mentality.

It is not condusive to building wealth in the long term.

Building wealth requires a shift in thinking to an owner mentality.

People who think this way tend to be more risk-tolerant, focused on educating themselves and are not scared of making mistakes as part of their learning experience.

People in this group are much more likely to take charge of their own financial futures, be entrepreneurial and ensure they understand the investments they make.

In business they are the people whose bonuses are linked to the profitability of their business unit/company - or they're the owners!

I know Paul falls into this group, as do I.

In summary: Don't work for a living - own for a living.

That's the key to wealth.

Cheers,

Aceyducey

 

[sbe]

Hi Paul,

from your comment...

2) a job is not the only way to start investing. I started without a job and without savings (to speak of).

Sounds like you have the answer that The Captain is after. (Heck, I'd like to know too!!)

Can you help us understand how with no job and no savings, you can start investing. I honestly am interested to learn from your experience.

As to the rest of it....sorry, but some of this cant go unchallenged...

1) a centrelink benefit does not imply unemployment benefits. Watch your assumptions, gang.

The Captain never raised this (centrelink). In fact, the only reference to Centrelink was HobGoblin, and that was for her personal situation.....

All we do know is The Captain has no job, but you have to admit though, a job is the most obvious starting point to get money. The Captain never explained if there was anything precluding this, so it's a fair path to follow down for the forum...He even offered a "Job" of bird-dogging (spotting) for investors.

Interestingly, certain Centrelink benefits will qualify for loans....

2) a job is not the only way to start investing. I started without a job and without savings (to speak of). That is an added incentive to work hard. Working hard does not require a job. Telling people to get a job without added input/analysis is a waste of bankdwidth.

True. But with no money, job, or alternative source of money (equity, loan, family), you are now in the extreamly hard box. If you're working hard - on what? Doesn't that define a job? Even if your job is options trading (one of the few ways to make money out of nothing, but very risky). Please, if you have something we're not aware of - share and "teach us all to fish"...

3) IMHO (not moderating) getting a job is potentially dangerous to your long term wealth. Only you can work out if that is the case, but remember...

IMHO, having a job was my key to gaining the finance to buy the properties to begin to free myself. Is it the ultimate way - good question, and the answer varies for each person. Some are not suited to being in other quadrants (from RDPD fame).

The enemy of the great life is the good life.

Very true, unless you have the discipline to focus on the great life.

The world is full of highly paid S quadrant people.

Yup. Some will graduate, a great many will not.


Seriously though, if anyone has the answer to The Captain, post it.

Oh, The Captain, I think on piece of advise you got earlier may need more research....

The excersise you call bird-dogging, is also known as acting as a buyers agent. You must be a licensed agent (Or acting under the authority of a licensed agent) to do this, otherwise you are doing it illegally.

That depends. If you are spotting, checking out and then alerting an investor to an opportunity - why would you need a license? Can someone help me understand why? He's not selling, just getting a spotters fee for teaming up buyer and seller.....A bit like helping a friend. The Buyer still has to do their Due Dilligence.....

Cheers to all. (Sorry if it sounds grumpy, it's not meant too!)

Simon

 

[paulzag]

Originally posted by sbe
As to the rest of it....sorry, but some of this cant go unchallenged...

1) a centrelink benefit does not imply unemployment benefits. Watch your assumptions, gang.

The Captain never raised this (centrelink). In fact, the only reference to Centrelink was HobGoblin, and that was for her personal situation.....

But some responded to hobgoblin with "Get a job". That is the point. And more importantly it is most people's assumptions that keep them poor.

Try "you need money to make money"
or
"you need a job to buy real estate"

No to both. It is easier in some ways to have a reliable wage for traditional lenders but not essential. more later on that.

All we do know is The Captain has no job, but you have to admit though, a job is the most obvious starting point to get money. The Captain never explained if there was anything precluding this, so it's a fair path to follow down for the forum...He even offered a "Job" of bird-dogging (spotting) for investors.

Definition of job - 1) A regular activity performed in exchange for payment, especially as one's trade, occupation, or profession.

Given I distinguished between "work" and "job" -- I think it's clear that "job" implies employment.

There are people who are unable (not unwilling) to hold regular employment. Should they not be allowed to create wealth? Must "welfare" recipients be consigned to the too hard basket?

What about people with physical and mental disabilities and illnesses? Those with environmental or situational obstacles?

Damn it people this forum is called INNOVATIVE TECHNIQUES.

Think outside the square.

There is no spoon!

2) a job is not the only way to start investing. I started without a job and without savings (to speak of). That is an added incentive to work hard. Working hard does not require a job. Telling people to get a job without added input/analysis is a waste of bankdwidth.

True. But with no money, job, or alternative source of money (equity, loan, family), you are now in the extreamly hard box. If you're working hard - on what? Doesn't that define a job? Even if your job is options trading (one of the few ways to make money out of nothing, but very risky). Please, if you have something we're not aware of - share and "teach us all to fish"...

See above re "job"

Fishing coming up in next post

3) IMHO (not moderating) getting a job is potentially dangerous to your long term wealth. Only you can work out if that is the case, but remember...

IMHO, having a job was my key to gaining the finance to buy the properties to begin to free myself. Is it the ultimate way - good question, and the answer varies for each person. Some are not suited to being in other quadrants (from RDPD fame).

Good on you - but the question was "I have no job, nor savings nor asset rich relatives - how can I invest?"

The world is full of highly paid S quadrant people.

Yup. Some will graduate, a great many will not.

And it is their attitude and effort in conjunction that will determine their result.

Oh, The Captain, I think on piece of advise you got earlier may need more research....

The excersise you call bird-dogging, is also known as acting as a buyers agent. You must be a licensed agent (Or acting under the authority of a licensed agent) to do this, otherwise you are doing it illegally.

That depends. If you are spotting, checking out and then alerting an investor to an opportunity - why would you need a license? Can someone help me understand why? He's not selling, just getting a spotters fee for teaming up buyer and seller.....A bit like helping a friend. The Buyer still has to do their Due Dilligence.....

Perfectly phrased, insightful and true. Now apply that thinking to the problem. Don't worry I'll do the same in the next post.

Captain can bird-dog either as an employee, on a commission or results basis or some other mutually agreed scenario. Unlikely the Captian can set up a bird-dogging business without being licensed though.

Cheers to all. (Sorry if it sounds grumpy, it's not meant too!)

Not grumpy Simon. I'm not picking on you up there - really! Just catching people's thinking.

Regards

paulzag

 

[paulzag]

10 ideas on starting with no job

With damn hard WORK (not JOB) how to go from 0 to 5 IP's.

Assumptions
A) it wont happen fast unless you're lucky - in which case you didn't need to follow any plan.

B) You will work harder than anybody with a job to get the same initial results.

C) I'd guess it will take about 7-14 years

D) Getting and keeping a job would be easier (but may leave you broke). How many posts have you read that said "bought my first IP then waited X year before I thought of doing it again, work got in the way."

E) We want this to be legal.

--------

1) Start earning cash now. That probably means learning how to sell something, anything, anywhere.
e.g.
self-employment sections of the papers.
market stalls.
Walk around industrial areas with your eyes open. Has someone got an overstock problem? Ask for a sample and a price. Hit the road.
Ask yourself how can I get something to sell on consignment?

2) Start small but scale quickly. Turn $5 into $10. Then $20 then $40 then $80 etc.

3) Learn to fix problems. Look for people with a problem and find a way to make that problem go away. That lets you set your own price that is not tied to time or personal effort.

4) Focus on cashflow. In the early days do not build a system to sell it. How much am I making per week/month (forget year). e.g. Some retailers break even on trading but make money by selling the business, others make money from day 1 -- guess who normally wins in the long run?

5) Put 5%-20% (say 10%) away for wealth creation. That way you'll know when you have enough to buy an accumulating asset. That % may be of gross sales or net profit whatever! But put it away out of every deal/week/invoice.

6) Network. Now. Go out and meet people. Not just your friends. Talk to business people, sales-reps, seminar-junkies, hairdressers, baristas and bar-tenders. Find a 2 sentence intro and ask them questions about themselves. If you can afford internet access you can afford to do a google search on how to network.

7) Optional. Find a deal that is too good to pass up and the money will appear. This is a fact!

8) Buy an asset (with your own money) that is 80% right as soon as you see it. You won't find anything perfect and the time you waste getting 95% perfect will cost you 2 deals. The learning experience is worth the mistakes. Remember you created the deposit and you can do it again it you make a mistake.

9) Did you know that if you had a 34% deposit the money is relatively easy to find?

10) once you have an investment system that works for you leverage it with investors. Realise almost no investor will back your first deal.

 

[sbe]

Excellent advice Paul. I think The Captain and others should benefit from this. There's some gems in there for anyone - including PAYE people. For Example - 10% savings always.

Of course, it still points out that you need money to buy the house. Paul does show a very innovative way though of getting it.

Note for everybody - As Paul pointed out, if you have 66% deposit, the money is a lot easier to find. You can approach many more "non-bank" lenders....

Pauls point # 8 is spot on - Analysis Paralysis can hinder you doing anything !

Remember - the first is the hardest, especially if you have no-one to mentor / guide you. You've done the right thing by being on this forum - lots of advice and knowledge around here.

I think if you're truly good at spotting those deals etc, you should follow up to see if people will pay you a fee for locating them. You may even find someone on this forum - perhaps Paul can suggest appropriate area to post it in?

All the Best to The Captain - keep at it and you'll get there. Determination and Perserverance counts for a lot.

Cheers,

Simon.

 

[WillG]

I hear what you are saying Paul.

echo
'Damn it people this forum is called INNOVATIVE TECHNIQUES'

Having a day job can lead you into a false sence of security.

Not having a 'day job' will force you to try things you wouldn't normally try or have the time for. If you are desperate enough you will find away.

The easy & obvious ways to generate cashflow are to get a day job, buy shares that give a dividend, buy a CF+ IP.

Practical examples of buying assets without any money, generating cashflow with little money

1. 'Trade' your skills for assets rather than money
2. Get in contact with 'entrepreneurial' friends and flesh out ideas
3. Vending machines
4. Mail order business
5. Work for a friends business in return for an ongoing share of the profits or shares in the business
6. Flipping mobile homes http://www.real-estate-online.com/ss-195.html
7. Search the internet for 'cashflow generation' ideas