Investing in Real Estate with No Money - Part One
There's a hard truth out there about getting rich and it's this; if you're already living as if you are rich, then you will never become rich. That means if your credit cards have a huge balance and you're drowning in debt, real estate investing is not going to rescue you.
I know... those guys on late night television introduced you to people who got out of debt and quit their jobs just 60 days after taking their real estate investing course. Let me tell you first hand that if those testimonials on t.v. are real, those people are the exception, not the rule.
Real estate investing is a solid way to make a lot of money. The best way is to set your goals and find properties that meet those goals (and then keep them for at least 5 years). If you look at the richest people in in Canada and in your city, at least 25% of them probably made their fortunes by investing in real estate. We believe that this estimate will hold true based on who we see on the list of Canada's richest people as well as the Power List for Vancouver.
The trick is to learn what you're doing, and then accelerate your investments after you have built a base of knowledge and equity. It's not the only way to make millions in real estate...but it's the way that requires less money, has the least amount of risk, and induces the least amount of panic attacks.
We started out with $16,000. Thankfully my wife Julie was a saver. When she graduated from University and started working as a sales rep, she continued to live like a student. And, she put every extra penny she had into paying down her student loan. When that was paid off, she proceeded to save any extra money that she had. Her plan was to go back to school for her MBA so she wanted to have as much cash in the bank as possible to pay for school.
When we met, I had a property with my Mom that we'd purchased years before, but didn't have much else. After years and years of being a student, I wanted to enjoy the money I was making. I drove a nice new financed Volkswagen and enjoyed my nights out in Victoria. I didn't spend money excessively, but I was carrying credit card debt and didn't have savings. Julie shared her visions of "retirement at 35" with me, and I got excited.
It didn't happen overnight, but it only took a few months to change my situation. I quickly paid off my credit card debt and started putting a few hundred dollars away each month in savings. And then we started shopping for our first investment property.
Thanks to Julie's savings, we didn't have to scramble as much to come up with the money for our first purchase. But there are still ways to purchase property even if you don't have anything saved.
You may have heard of 'no money down' programs, and though they certainly exist and they can work, they're also very risky. Usually this is too much risk for an average person to handle, and why would you want to handle it anyway? Especially when there are three much less riskier ways to get into real estate investing:
1. Cashing out your savings, including stocks, retirement and GICs
2. Your home's equity
3. Partner(s) that have money.
Here's the hard reality that you won't like to hear though. Finding a partner will be next to impossible if your own finances are ugly. If you have no experience investing in real estate, you are deep in debt and you are trying to get rich on my money, what exactly is in it for me, as your potential partner? It just sounds risky to me.
However, if you're in 'good debt' (like the kind that comes from student loans that you have been diligently paying down) and if you've done your research on real estate investing, then a partner starts to think differently about your debt. After all, you know how to control your money, so you won't waste his/her money. The potential partner feels that you can be trusted and that any risk to investing with you is slight.
Did you notice the difference? In the first instance, the person is in debt with no plan, no experience, and no way to get out. In the second instance, the person is in debt, but has a plan - so you know their debt will be over soon and they will be not be depending on your money forever.
So now you understand why controlling your finances also means controlling your destiny. Start spending less than what you make. If you're not sure if you do that, keep a spending journal for the next six months. Write down what you bought, the cost, when you bought it and then evaluate whether or not you really needed it. In no time at all, you'll have a pretty good idea of where your money is going and what you can cut out in order to save even more money.
Oh - I hear it already - "but, Dave, it's Christmas", or "it's Sally's birthday", or "we've been planning the trip to Disneyland for three years"! Well, if you've saved up for those things, great! Go for it! But, if you are going to go into debt for those things then you are a SPENDER, not a SAVER, and you're obviously not serious enough about growing your wealth and becoming a rich real estate investor. - 23208
I know... those guys on late night television introduced you to people who got out of debt and quit their jobs just 60 days after taking their real estate investing course. Let me tell you first hand that if those testimonials on t.v. are real, those people are the exception, not the rule.
Real estate investing is a solid way to make a lot of money. The best way is to set your goals and find properties that meet those goals (and then keep them for at least 5 years). If you look at the richest people in in Canada and in your city, at least 25% of them probably made their fortunes by investing in real estate. We believe that this estimate will hold true based on who we see on the list of Canada's richest people as well as the Power List for Vancouver.
The trick is to learn what you're doing, and then accelerate your investments after you have built a base of knowledge and equity. It's not the only way to make millions in real estate...but it's the way that requires less money, has the least amount of risk, and induces the least amount of panic attacks.
We started out with $16,000. Thankfully my wife Julie was a saver. When she graduated from University and started working as a sales rep, she continued to live like a student. And, she put every extra penny she had into paying down her student loan. When that was paid off, she proceeded to save any extra money that she had. Her plan was to go back to school for her MBA so she wanted to have as much cash in the bank as possible to pay for school.
When we met, I had a property with my Mom that we'd purchased years before, but didn't have much else. After years and years of being a student, I wanted to enjoy the money I was making. I drove a nice new financed Volkswagen and enjoyed my nights out in Victoria. I didn't spend money excessively, but I was carrying credit card debt and didn't have savings. Julie shared her visions of "retirement at 35" with me, and I got excited.
It didn't happen overnight, but it only took a few months to change my situation. I quickly paid off my credit card debt and started putting a few hundred dollars away each month in savings. And then we started shopping for our first investment property.
Thanks to Julie's savings, we didn't have to scramble as much to come up with the money for our first purchase. But there are still ways to purchase property even if you don't have anything saved.
You may have heard of 'no money down' programs, and though they certainly exist and they can work, they're also very risky. Usually this is too much risk for an average person to handle, and why would you want to handle it anyway? Especially when there are three much less riskier ways to get into real estate investing:
1. Cashing out your savings, including stocks, retirement and GICs
2. Your home's equity
3. Partner(s) that have money.
Here's the hard reality that you won't like to hear though. Finding a partner will be next to impossible if your own finances are ugly. If you have no experience investing in real estate, you are deep in debt and you are trying to get rich on my money, what exactly is in it for me, as your potential partner? It just sounds risky to me.
However, if you're in 'good debt' (like the kind that comes from student loans that you have been diligently paying down) and if you've done your research on real estate investing, then a partner starts to think differently about your debt. After all, you know how to control your money, so you won't waste his/her money. The potential partner feels that you can be trusted and that any risk to investing with you is slight.
Did you notice the difference? In the first instance, the person is in debt with no plan, no experience, and no way to get out. In the second instance, the person is in debt, but has a plan - so you know their debt will be over soon and they will be not be depending on your money forever.
So now you understand why controlling your finances also means controlling your destiny. Start spending less than what you make. If you're not sure if you do that, keep a spending journal for the next six months. Write down what you bought, the cost, when you bought it and then evaluate whether or not you really needed it. In no time at all, you'll have a pretty good idea of where your money is going and what you can cut out in order to save even more money.
Oh - I hear it already - "but, Dave, it's Christmas", or "it's Sally's birthday", or "we've been planning the trip to Disneyland for three years"! Well, if you've saved up for those things, great! Go for it! But, if you are going to go into debt for those things then you are a SPENDER, not a SAVER, and you're obviously not serious enough about growing your wealth and becoming a rich real estate investor. - 23208
About the Author:
Learn How to Retire with Real Estate with Dave's free Real Estate Investing Starter Tips Guide. Learn how to find money for real estate deals, create financial freedom, positive cashflow and massive wealth with tips like: How to find quality investment properties, finding and keeping great tenants, and easy ways to make more money with real estate.
posted by X - Men @ 5:08 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home