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How Do I Buy Real Estate

June 12, 2018

Everyone wants to know How do I buy real estate. Especially if I have little or no money. It seems almost impossible. Believe it or not, I will give you a few ways that you can buy real estate even in this HOT market that we are in right now.

First, you have to have SOME money. Even if it is just a little. If you dont have any money at the end of every month, it is your fault. I am sorry for sounding mean and I dont want you to be a complainy-pants and go crying that I was mean. But its true, its your fault.

First how do you get some money. The easiest way is to stop spending so damn much. You either spend too much on your house, car or you go out to eat too much. Those are the quickest, easiest ways to cut the fat out of your budget. Get that under control and you should have $10,000 by the end of next year. Now you will be ready to buy a property. After reading this post you should not ask how do I buy real estate, you should be ready to purchase.

Second, I dont like to hear when people buy retail properties. I only buy properties when there is some sort of distress or there is some kind of financing that will make the deal sweet. Anyone can call a realtor and say that they are looking for a property in X area, at Y price. BAM there are probably about 10 properties for sale in the area that you are looking. Anyone can finance these properties by going to a bank, credit union or mortgage company.

This is not how investors buy properties. I have bought properties from people who are months or years behind on their mortgage, property taxes, irs taxes, about to get divorced, or the property is just plain crappy. There is no way to sugar coat it. I buy ugly houses, most of them. It is right here where you will find great deals that might even have financing that comes along with them.

So now you know that you have to stop spending on junk in your life, build up a little cash, start looking for people in a situation, and maybe even look for ugly houses. Now the big part of the equation is HOW do I buy real estate.

One big fact that you have to keep in mind all this time: PEOPLE ARE CRAZY. If you can keep that in mind, things will go much better for you. You will end up talking with 10, 20 maybe even 30 people before you purchase a property. Some people will be way behind on their payments and the home needs lots of repairs and they think they can get retail price. You will have to just pass on the crazies.

Another thing to keep in mind when talking to people is that they are under stress. People under stress need a friend and someone who is willing to help them. BE HELPFUL. I ask everyone what they want to do. If they want to stay in the house, I will do what I can to help them achieve that. The ones who say that they just need to go, I buy, maybe.

The house has to be a deal in order to buy it. If it is then go for it. I always ask the seller if there is a mortgage that I can take over payments. If they are ok with me making their payments, WOW, I dont have to get a new loan. I just get the deed and its mine. Of course, keep making the payments.

If there is no loan on the property, I ask the seller if I can make payments for the next 10 or so years. This is called owner financing. Most people dont like to hear the words, “Owner Financing” though. I just say something like how about I give you a little down payment and make payments for the next 10 years so that you have a little extra income.

If the seller does not let you take over payments and wants to be cashed out of the property what do you do? You have to get a new loan. How about if you dont qualify for a new loan. You have 3 ways you can work this out. You can wholesale the property, get a hard money loan or private lender, or partner on the deal.

1. Wholesale. If it is truly a great deal, someone will want to pay you at least $1000 or maybe even up to $5k or 6k to pass the deal to them. I have sold some deals this way because I was not in a position to purchase the property myself. Network with lots of folks so that You always have someone ready to purchase a good deal from you. I have also purchased a few properties from friends who were not in a position to purchase the deal so they passed it to me for a few Gs.
2. Hard Money or Private Money.  After you are in the game a little while you end up knowing lots of people. Some people may have some retirement money hanging around to make investments. Sometimes they will trust you enough to lend you the money to buy deals for yourself. This is called Private Money. It is kinda like having your own personal bank where you can borrow money from friends and/or family. Hard Money is like a bank that does not mind that your property looks horrible. Hard money lenders are usually found at your local investor groups. They usually charge 5% to 8% more than a bank would. It is not cheap by any means, but they may lend part or even all of the rehab money too.
3. Find a Partner on the deal. Sometimes friends and family may not be happy with 8% return and want a little more. I have done deals where someone will put up all the money for the purchase and rehab. After the property is sold, we split the profits. I end up losing half of my profits, but otherwise I may have NOT been able to do the deal. I always say that 50% of a deal is better than 100% of nothing.

These days I do different things for different deals. If I can get into the property on a sub-to(take over payments) and the property needs repairs, I might do it myself. When lots of capital is deployed I  might get a 2nd on the property from a private lender. If they wanted to be on the deed, I might be 50/50 partners with them. The combinations are almost endless in how you can structure the purchase of real estate.

I have been the one to call for a 50/50 deal. Sometimes I have to call someone to help me take the deal down. Whatever you lack, whether money, knowledge or whatever, find someone who can fill space that you cant. Partnering is what I have found lately to be beneficial to all parties.

It does take a willing friend or family member who has some money to get the deal done. Just remember it does not have to be YOUR money. Keep in mind that to get someone to invest with you or to buy from you, that you need a great deal. It all starts with a GREAT DEAL.

I have a class several times a year that teaches more in depth knowledge about finding the deals. All the information is found here on the website on the CLASS tab. There are also meetings locally where we have guest speakers who teach their trade whether lender, wholesaler, property manager, etc. The meetings on the 2nd Wednesday of the month are free. Like my facebook page: Bellizzima Investments for more info on the meetings.

The classes are $499.00 and are great for someone looking to get started in real estate investing. If you have purchased some properties and need further in depth knowledge of a topic, give me a call. I personally mentor other investors if they are interested in owner financing, notes, wrap around mortgages, or just about any topic of real estate.

Personal training will be on an individual or small group rate. You can always give me a call and get more information.

Get out there and find some deals.