Prosper Newsletter: March 2007 > Real Estate
You understand that the following information is educational in nature and is not intended to be legal, accounting, or tax advice. You are responsible for your own financial decisions and should consult your own legal, accounting, and tax advisors before making your financial decisions.
Getting Out of the Rat Race
I wanted to share my personal story with Prosper Learning.
I challenged myself in 2006 to set direction to get myself out of the 'Rat Race' of working for my money. I planned to have my money work for me. I have always had an interest in Real Estate but began the year getting investment training in trading. But realized quickly that trading is far riskier than real estate.
I came to Prosper Learning through the Learning Annex in September not knowing anything about real estate investing. Through our work together I have learned the process and procedures for real estate investing. With this I have set up my first LLC, obtained three cash flow rental properties in three other markets besides where I live and made $30K in my first deal. I am looking at two other deals this week as well. The major lesson learned is that I now use time outside of my day job looking for property deals and going to see them instead of watching television.
I thank you for your support.
Regards,
- Bill N.
Can you invest in real estate with no money? The answer is No. Contrary to what you may have heard, when investing in real estate you have to have money or at least access to money. There is no such thing as buying real estate with no money. The good news is it doesn't have to be your own money and this is why real estate is such an attractive business and investment. So as an investor, you need to make sure you have access to good sources of capital regardless if you are a new investor or a seasoned investor. Having sources of money will also make working with real estate agents much easier and will give them more incentive and motivation to help you find deals.
Start with a mortgage broker, as opposed to your local bank. A mortgage broker is going to be more for investor-friendly and will have access to a much broader range of investment loan products. Don't stop there. You also want to have relationships with hard-money lenders. These lenders provide short-term financing primarily for rehab projects. They work significantly different than traditional lenders in terms of how they value projects and how they determine lending limits. You will find them much more flexible than traditional lenders. Lastly, you should always be forging relationships with other investors and other private parties that may be interested in investing in your projects or partnering with you on your deals. Real estate investment clubs are a great place to meet these people.
The last thing you want to have happen is to spend value time and energy looking for deals and then have the deals fall apart because of lack capital and funding.
Real Estate Investment Clubs
There are many benefits to joining a Real Estate Club. The biggest benefit is the opportunity to network. Some people feel like they don't want to be a part of a club because other people will snatch up all the good deals, but there are more good deals to go around than any one person can afford, so by utilizing the opportunity to network, everybody wins. It is also a good way to share experiences and references and learn from others. Some clubs also provide a wealth of resource materials that you can use to help further your Real Estate business.
An example of an average club meeting would include speakers such as attorneys, mortgage brokers, contractors interested in remodeling, website managers, people who could help you repair your credit, and people who would want to lend you money. It is a fabulous way to construct a dream team or a support group to help you achieve your goals.
Typical meetings start out with investor basics, then are followed by a networking portion where some of the people state what they want to sell, and then others state what they want to buy, and then they can network and help people achieve their objective. If you remember that somebody has a duplex to sell, and then a few weeks later find someone looking for a duplex, you can match the two people up and hopefully receive a finder's fee, and then you can make money without even having to buy or sell anything.
The price ranges for the clubs are usually ten to twenty-five dollars at the door, and sometimes you will get a discount if you pay an annual membership of around 100 dollars a year. The most expensive club charges 1,100 dollars a year, but it includes four full day seminars, so you get what you pay for. Some clubs will allow you to come as a guest for a few times, then they will require an annual membership.
