David Whisnant

Can I Start With No Money or Credit? Is Flipping Legal?
by David Whisnant

This is a critical article to read if you have a strong desire to be a real estate investor, but do not have any savings or income to operate on a conventional playing field. Remember that to get a loan from a lender, all you need is cash OR credit. Thus, if you have some money in the bank, or a 401(k) with some money, lenders will loan you money even with poor to marginal credit. If you have excellent credit, you can get a loan with no money in the bank. Thus, you only need credit OR cash to get loans. Remember that after your first deal, you will have filled that requirement, as you will have cash. (Don’t blow that first $30,000 in a BMW!) The hard part is learning how to do that first deal, and we teach you multiple ways to attack that problem that avoid making embarrassing or confusing offers.

If you have neither credit nor cash, and still want to operate on a conventional playing field where you get loans for properties and pay all cash with no “crazy” no money down TV seminar type offers, I have great news for you -- Hard money lenders. Most hard money lenders could care less about you or your credit. They look to the property as their security. If you don’t pay on the loan, they know that they can turn around and sell the property for enough to get their money out. We go into more details on this in the full course. We will give you a system to track these lenders down in your town in our Full Course, will loan based on the property. If you strike a good deal, they will loan 65% of the value of the property in renovated condition.

Thus, if you find a home that is worth $100,000 fixed up, and you can buy it for $60,000, the lender will give you 65% of the fixed up value of the home, or $65,000. $60,000 of that will get you into the property for no money down, and the extra $5,000 can be used for closing costs and/or repairs. You can then flip this property to another investor for cash, or rehab it yourself for maximum profits. The great thing about these loans is that you can typically close within 7 days. The only drawback is higher fees, but let’s face it, a few extra points on the loan to close is still cheaper than having a partner.

I started with nothing and leveraged credit cards to get into my first house, so starting with nothing is something that I know about personally.

A point on flipping: We have received questions from students as to whether or not flipping is illegal. It is not. What IS illegal is taking a property, getting false appraisals through corrupt appraisers, and over-financing the property with corrupt lenders. Once the property has had tons of cash pulled out, the corrupt group would then walk away and pocket the money. The lender would be left holding the bag. That is not what we are about. Owning a property for a short amount of time and reselling is completely legal, and the basis on which this economy is built. There is nothing wrong with owning something for a brief period, using your skills to find a buyer, and reselling that property. People do this every day in the stock market. Car dealers do it every day with cars that they buy and immediately wholesale. The word flipping has attached to the illegal activities that you have probably read about in your local papers, but owning for a short time, is not and never has been illegal.

The only problem that you will have is convincing the appraiser that the property you bought last week for $100,000 is now worth $130,000. In a worst case scenario, your buyer’s lender may require several appraisals to verify the increased value.


David Whisnant
Dave Whisnant is an Atlanta investor/attorney who is dedicated to helping people land their first deals and create whatever level of success in real estate that they desire.

After successfully building a real estate law practice, Dave walked away from it to focus on real estate when he saw the profits that his clients were making. Jumping in with both feet, he created a proprietary model that rocketed him to the top of Atlanta investors almost from day one.

Dave is different than other investors in his single-minded quest to perfect a series of cutting-edge prospecting tactics to locate and then land motivated sellers who other investors are not even aware of.

A master investor AND teacher, Dave’s precise and easily duplicated systems have been successfully implemented by his students around the country in competitive markets of ALL kinds.

He believes in freely sharing his expertise and information for the benefit of anyone who is serious about succeeding, and believes that his techniques will create more success stories per student than any other real estate investing coach in the world in 2006.

Real estate investing has enabled Dave to have the freedom that enables him to spend time with his two young daughters, wife, and “herd” of golden retrievers.


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