I recently had a friend of mine tell me, “It takes money to make money in real estate investing.”
I was surprised he said that because this little phrase is one of the biggest and most dangerous lies out there… It is a convenient excuse to not try to succeed.
It’s like the old joke:
Lord, I’ve worked hard all my life, why couldn’t you have just let me win the lottery?”
The Lord replied, “Why didn’t you just buy a ticket?”
When it comes to investing in preforeclosure homes or probate homes, you’ve got to try. And it doesn’t “take money to make money”…
I have done many foreclosure and probate deals where I put up no money at all… Instead, I put in “sweat equity.” Meaning that I found the good deal, and did all the work necessary to make a profit for my partner and myself. ‘
I did most of the work on these projects, adding value to our investment. I supervised the repairs that were needed. I made sure the grass was being watered and mowed. Remember, I put zero money in and I still made 50% of the profit on each probate home and foreclosure home that I found!
So in these cases, it didn’t “take money to make money in real estate.”
My situation is not unique in real estate… A common deal for one of my students goes like this:
My student knows the best deals are in probate homes, and to a lesser extent, preforeclosure homes. He finds a great deal on a probate home that he can buy for $200,000, put $40,000 into, and sell for $300,000. The problem is, he has no money. So he finds an old guy with money, and they agree to split the profits 50/50. If the deal goes according to plan, they both walk away with a $30,000 profit (minus some costs).
My student had the only two things you need: 1) he knew how to find bargain deals on probate homes and preforeclosure homes and 2) he had the willingness to get to work and make it happen… He did everything from finding the old guy and convincing him to invest, all the way through to selling the property.
In this example, my student didn’t even have any risk in the deal.
It doesn’t take money to make money. You just need two things:
1. Knowing how to find bargains on probate and preforeclosure homes.
2. Ability to roll up your sleeves and make it happen.
You can’t underestimate either of those things. The amount of effort and commitment required for probate and preforeclosure investing will be extraordinary. But that’s the way it goes. You’re trying to break out of the ordinary. So an ordinary effort won’t cut it. As a beginner starting out with no money, you will need to sustain an extraordinary effort.
This is the hard truth. But it’s how you make money in real estate.
It is much easier to give up. It is much easier to say, “It takes money to make money” and never try. It is much easier to complain that you’ll never win the lottery, without buying a ticket. (You know what I mean.)
Don’t ever catch yourself saying, “It takes money to make money in real estate.”
It doesn’t… It takes a great idea (like buying probate homes) and the willingness to make it happen.
Now get to it! You can do it and I’ll show you exactly how.