Real estate investing is like a road trip to college. There are so many twists and turns and there is no telling where you will end up; But that’s the beauty of it all, isn’t it?

Well, the real beauty of this trip is that unlike a college road trip where you SPEND loads of cash on gas and snacks, you’re on a road trip to MAKE loads of cash.

These are different ways that anyone from the rich to the poor can start making money investing in real estate and I have linked to almost every category if you are looking for more information on a certain topic. Enjoy the ride and it can be bumpy.

Penniless?

Not having money in real estate investments is difficult; especially when you hear everyone say “NO MONEY” and “BUY A HOUSE TODAY WITHOUT USING YOUR MONEY”. It is not impossible, but it is much more difficult.

Being a Bird dog is the EASIEST way to make money in real estate by far. It involves networking with investors in your area or you could do virtual bird tracking if you wanted.

All you have to do is find the right properties for the right investors and they will take care of the rest. All the paperwork, dealing with sellers and buyers; Things like that. If any deal you bring them ever closes, you should have a check waiting for you; and all you did was bring them an address.

  • PROS: Less paperwork, work for yourself and make your own hours, no money required and you get to work closely with a REI who is living life so pick their brains as much as you can. It’s almost like getting paid to be a tutee.
  • CONS: REI is a numbers game. The more tracks you make, the more money you will earn. Simple as that. Many bird dogs give up after submitting a few properties and miss out on a true REI education.

You can always market someone else’s properties, but I would confirm with them first so everyone is on the same page. If you’re lucky, you can get a finder’s fee for finding a buyer and most wholesalers will split the deal down the middle with you. MOST <== Not all. This can be done by focusing on building your buyers list, which should be a priority for EVERY investor.

  • PROS: You don’t need to have property under contract to make some money; big net
  • Cons: Some investors don’t like others to market their properties, so check with them first to see if it’s okay if you buy their properties from some of their buyers. It can also be risky, so it’s good BUSINESS practice to have everything in writing. Also, you need to keep up with the investor because he doesn’t want to end up selling a property that is off the market. It makes you look bad.

little money

Wholesale is by far one of the fastest ways to make money in REI. If you can get the right home at the right price and find a buyer for yourself, not only will you be able to keep the non-refundable deposit, but if all goes well, you’ll have a check waiting for you after closing.

Sounds easy now, but wholesale can get very technical when it comes to talking to sellers, buyers, and agents.

After a while you get a feel for things. Just know that almost every conversation you’ll have ARE negotiations, so always be on your guard.

  • PROS: earn money fast, meet very interesting people, good or bad, and learn about other ways to earn money.
  • CONS: YOU NEED SOME money to wholesale. At least for marketing. You can go the cheaper route and do door-to-door flyers in certain neighborhoods or windbreaks, but I prefer neon-colored business cards, laundry mat flyers, bandit signs, and a few more things.

Something you should know first…

Now that you know that wholesale is selling houses, but there is more to knowing than just selling houses. You may choose to sell private homes, short sales, and/or REO. Changing REO is the most complicated because the standard Florida contract must be used and it clearly states that “contract is NOT assignable” so you will have to learn the tricks industry leaders use to earn around 100k a month changing REO. is not nobody’s Business.

  • PROS: If your buyer list is limited, you can do REO’s all day without actually doing any marketing. MLS has an endless supply of REOs available to play.
  • CONS: Just know that most lenders require a 1k or 2k deposit for the contract to be valid, but there are ways around this and one of them is to have a strong buyer list where you bring in a buyer and they do the deposit because they want the property. It’s basically getting the buyer exactly what he wants.

Short Selling… A Lot About Who You Know

Short sales are a little different than REO’s. You can get a contract short sale without making a deposit, but the whole process is much easier if you have an agent to work with.

You tell them what you want and they will get it for you at the right price to reach your buyer, but this is much easier than it sounds. Many brokers are not “investor friendly” so it may take some time to find one you can work with.

  • PROS: There is a lot to choose from in MLS. You can get by without having to make a deposit.
  • CONS: Sometimes the list price is a price the lender has negotiated to sell and they usually don’t want to budget so their offer can be countered or thrown in the trash… Literally. This can slow down the wholesale process if they have to go back and renegotiate the price.

Motivated private sellers… There must be REASON…

Motivated private sellers are people who tested the market and couldn’t even sell the house if they came to buy one get one free. They are FSBOs, inherited homes, probate, and weary homeowners. These people just have a house they need to sell and you are there with a brilliant offer once you show up with your CASH offer you close the 14 day plan. Some jump for joy.

  • PROS: These are regular people who don’t know the market and some need money so since you’re offering this amazing deal to buy the house AS IS for CASH and CLOSED QUICK they throw you the keys; sometimes with a boat in the yard. Their usually EXTREMELY high asking prices can be negotiated down to where you can make a lot of money. I’ve seen a check from Preston Ely for 80,000 in 1 deal, so yes, they can be traded lower.
  • CONS: Some of these people think that their house is worth more than it really is, so it takes convincing and sometimes it can be quite a task. You have to market like CRAZY to get a good deal for motivated private sellers. Bandit signs, drive for bucks, and direct mail marketing are a few ways to capture these leads.

Outsourcing

Outsourcing in your business may cost you a lot of money, but it saves you a lot of time, and you know that time is money, right? Especially in REI. You can outsource things like putting seller or buyer ads on different sites on the web.

What about the bandit sign? Don’t you hate taking them out? I know you do, but you can outsource all the more exhausting things to other people and focus your time on the most important things… like your family.

  • PROS: You can have people work for you for $1 an hour. These are called virtual assistants. Get a team and you will be completely free to do whatever you want to do in life.
  • CONS: If not done correctly, it could COLLAPSE everything you have worked hard to build. You have to really train these people, but there are steps to do that that you need to follow.

I have a lot of money!

Having money in REI is like playing basketball in sneakers instead of flip-flops. It’s so much easier. You can pretty much do all of the different companies above and once you learn them, hire assistants and virtual assistants to do time consuming tasks so you can focus on more important tasks.

Owners rule the… market

In case you didn’t know, landlords are running the market right now. They are buying properties for cash and then putting tenants on them to collect monthly cash flow.

If you don’t understand why this is important, then you need to read Robert Kiyosaki’s Rich Dad Poor Dad. It really looks at what the rich are doing that many don’t even know about.

Is there a way for investors to put their money into these properties and not have to pay taxes on the money earned or something, but that’s another story.

  • PROS: Generate monthly cash flow while sitting at home. Hire property managers to manage the properties. Some buy and hold waiting for the market to turn and then sell some of their homes for millions in profit.
  • CONS: Many landlords cross the line and have to sell part of their home at a loss. The tenants are ordinary people, so they will give you trouble. You also HAVE to know certain tax laws or you will be charged fines and other Uncle Sam type things.

Private Hard Money Lenders ROCK!

These are the people who let you buy houses and fix them up without using a dime of your own. Now, if you’re looking to be a private money lender, you should do some research on different ways to offer your money before you dive in because you could end up with a house that NO ONE wants if you’re not careful.

If you’re looking to use private or hard money lenders, many want you to put up a certain amount like half, so don’t think you’ll only get the full amount and skip dee doo all the way to the bank for a check.

Private lenders are a little different though because these are just everyday Starbucks drinks to people who have a LOT of money. If you befriend one, you can get 100% of your bids funded until the close of the table. They will get a certain percentage of your cut, but everyone makes money when private lenders are involved.

For someone looking to get money:

  • PROS: You can undertake a rehab project and not pay a penny of your money up front. Make more money. Build a good relationship with a private lender and you could get 100% of your deals financed. You can do all this with BAD CREDIT.
  • CONS: Hard money usually requires you to put up a large percentage or they will match what you put in. It can be hard to think in the middle if you came in thinking “NO STARTING MONEY”. LOL.

For someone looking for money:

  • PROS: Private lenders can make money while sitting at home drinking lemonade. You receive a percentage of the money at closing. Find someone (like me) you like to work with and they could be financing deals and move on to pink lemonade after closing a few deals.
  • CONS: I can’t think of any. Do you earn money while sitting at home???? If you know of any, please comment. Thank you

Well, that’s real estate investing in a nutshell, as they say. If you have anything to add about your experience, any questions or input, please feel free to leave a comment.

-Dennis Marshall