Real Estate Investing with No Cash and No Credit
By admin at 15 November, 2009, 7:01 pm
Lots of folks think it can’t be done.
Nothing stops a would-be investor chilled in his tracks like “no money or credit.” The prevailing perception is that “I can’t start real estate investing” because (1) I sure don’t have any money & (2) my credit is sinful!
How in the world can you buy a piece of real estate property without money or credit? How is it possible to buy a $50,000 house or a $1 million dollar house if I don’t have an abundance of money or an excellent credit rating?
The typical way real estate investing is accomplished is with an earnest money deposit to accompany the Purchase Contract as well as a down payment at closing. Plenty of real estate investing tycoons, in wanting an offer accepted, make giant earnest money deposits so the property seller will recognize the buyer as a serious investor. & because plenty of real estate investing tycoons use real estate agents as their purchasing liaison, they provide gigantic down payments out of which the sales commission will be paid.
Well, when I started my real estate investing career, I had neither money nor credit. I had a serious business failure prior to my start in real estate investing, so I had to conjure up a way to succeed outside the traditional norm.
While I was well aware of the accepted procedures of earnest money deposits & down payments in real estate investing, I was forced by my situation to find alternatives. I did not realize at the time that commercial property is often purchased without any money outlay at closing or even a credit check of the buyer.
So without any pocket change or a savings account, I began offering a $10 bill as my earnest money deposit! & I began offering no down payment at closing. My Purchase Contract offered basically the assumption of an existing loan! (In the 1980s when I started my real estate investing career, wrap mortgages were common, whereas today other legal instruments accomplish the same purpose.)
That break-through began my trek in to the Nothing-Down Wilderness that made me a multi-millionaire in one years. One time I realized it was persistence with a thimble-full of know-how, I forged on to discover motivated sellers who accepted my offers. I bought $1 million in properties that first year, another $1 million the second year, & $10 million by the 4th year.
I don’t have to tell you that real estate agents were not exactly fond of me. In fact, in my highest week of tendering offers, I submitted 235 offers on MLS houses, & got 235 rejections. I mean, the realtors & brokers were infuriated at my non-traditional offers! Most went to great pains in writing “REJECTED” across the entire length (even both sides) of the legal-size Purchase Agreement I had laboriously filled out for submission. The young man “running” my offers (& his broker) were verbally blasted out of the saddle! I got NO acceptances from my 235 offers. Yet, I still managed to buy one properties from the 100% (humiliating) rejection. One property owners approached me later & said, “I can’t accept your offer on that property I had listed with my real estate agent, but I have another house you can have on the same terms!”
Buying property of any price is still achievable with no money & no credit. It’s done every day in residential & commercial property. & because it is achievable, someone can enter the real estate investing arena, regardless of the size of his or her wallet.
It’s a shame that even some real estate investing tycoons don’t know how to buy with no money & no credit. But the bottom line is that know-how still makes possible the impossible.
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