JimmyZ Explains Real Estate Investing…with no money!
by Jim “JimmyZ” Zaspel
Hang on a second here, Mr. Jim Zaspel! Isn’t that an oxymoron? By the definition of the word, doesn’t someone have to have money to “invest” in something? Ok, you do have to have a little money. You must have ten dollars for the deposit.
The concept I just described to you has made hundreds of thousands and even millions of dollars for many people. Contrary to popular opinion, no matter what kind of residential real estate investing deal you do, you should get paid for what you know, not for how much you spend or the amount of debt you guarantee from a bank.
Now if you are going to earn an income based on what you know about real estate, then shouldn’t you try to learn as much as possible? This is where many people fail. People fail to invest in themselves, so they are left to do all they know to do about investing, and that is leveraging their wallets instead of their brains and continuing to work hard instead of smart.
What I want to do here is give a brief overview of the four basic ways to invest in real estate without using your own money or personally guaranteeing any debt, and then I am going to focus on how actually to find the motivated sellers and buyers with none of your own money on marketing. Does that sound good to you? Well then let’s get started.
Here are the four basic ways to buy and sell real estate the “No-Money” way:
To wholesale a property you get a property “under contract” at a discounted price and with just a ten or perhaps a hundred dollar deposit. The price of the home is deeply discounted because it needs much repair work. Then you find someone who is willing to pay more for the property than your contracted price. At closing you will get paid an Assignment Fee for assigning your contract to buy that piece of real estate to your buyer. In this scenario, your buyer buys it directly from your seller so that you never have to bring the funds to closing — you simply make the middle man cut. I made $13,800 on my first wholesale deal. I’ll never forget seeing that check made out to “Jim Zaspel” for that amount…it changed my life forever. That’s when this business became REAL to me!
More or less the same as Wholesaling except that a different agreement is used, and it is generally used on pretty (no repairs needed) houses. When optioning a property, you most often will be finding an owner-occupant buyer — that is, someone who wants to purchase the property to live in it. Keep in mind that you can also option a property on any terms! For instance, you could get the option to buy it for cash, subject to, with owner financing, or with a lease option. Right now, lease option deals (i.e. getting the OPTION to lease-option the house and then “assigning” it to the end user) are accounting for about 4-5 of my deals per month right now!
3. Subject To
This has made me the most money of any of the strategies. This technique is generally used when buying a pretty house and selling it to an owner occupant. Buying a property “subject to” the underlying loan is to have the existing loan stay in the name of the seller, but the deed transfers to the buyer’s name. You can then sell this property on a Lease-Purchase or Owner-Financing program.
4. Rehabbing and Retailing
Here you purchase run-down property with private money. Private money is money that is borrowed from a private individual. When borrowing private money to buy a fixer-upper, be sure to borrow enough to cover the purchase price, repair costs, and a small slush fund.
That is all the detail I am going to go into regarding the actual transactions. For the rest of this chapter, I am going to assume that you know the fundamentals of these four basic ways to buy and sell houses.
If you want more info on how to utilize those strategies, then just hit me up and let me know! Otherwise, what I’m going to talk about for the next few days is how to find the deals and how to find the buyers for the houses…even if you can’t afford to spend any money on real estate marketing. Sound cool? Stay tuned! 🙂
Oh hey! If you liked this blog, please do two things…
1) Please “like” it and share it on facebook 🙂
2) You might enjoy this video I made on this very topic! http://www.youtube.com/watch?v=pxpXCrWpIGs
To your success,
– Jim “JimmyZ” Zaspel