It Takes Money to Make Money and Other Big Lies
|Whoever said it takes money to make money was someone trying to justify why theyíre broke. It does not take money to make money, and Iíll prove it. Iíll give you a step by step plan to buy and sell a house, even if youíre absolutely broke, have a negative net worth, no job, no friends, no credit and just got pardoned from the state prison. The truth is, if you canít make money without money, you canít make money with money!|
When I started in 1982, I had no money or credit. I was broke. I had no credit cards, no rich relatives, not even a wife working to support me. I was lying in the gutter looking up at the curb. Iíd quit my job and burned the ships behind me. The only way out was to make it, or get another job. I had a mortgage and bills just like everyone else, yet somehow I made it happen. I succeeded in spite of the odds stacked against me.
You wanna know why? Iíll tell ya why! I succeeded because I had no money or credit! Believe it or not, having money and credit when you begin your career as a real estate entrepreneur can do you more harm than good. It can ruin you if youíre not careful. Having no money keeps you focused on doing the deals that donít require money. If your credit sucks, like mine did, you canít apply for bank loans. Therefore, you have inadvertently avoided the two biggest mine fields. Not because you were so smart, but because you had no choice.
Whether you have money or not, you should learn to leverage your brain, not your wallet. When you do that, having money becomes a non-issue because you donít need it to buy houses. If you write big checks, youíre always worried about losing those checks. If you guarantee loans, you risk everything you own. Do neither, and you eliminate your risk. I bet Iíve said those words a thousand times, and I still see people who should know better doing it anyway.
Donít get me wrong, Iím not saying you shouldnít have money. Iíd actually prefer you to be filthy, stinking rich! Iím just saying youíll get there a lot quicker if buying houses doesnít depend on your capital or the number of loans you can borrow. Because if it does, youíre a slave to your limited resources and your business will move at a snailís pace.
How many loans can you get before you get cut off? Only a handful! Then what? How many deals can you buy if you have to write a check for each? You get the drift. On the other hand, how many loans can you take subject to before you get cut off? Thatís right, there is no limit! And no oneís counting, because itís endless. You can buy 500 houses and never ask permission or fill out an application to submit to a brainless loan officer.
The loans are not on your credit, and you arenít personally liable. If disaster strikes before the loans are paid off, like a deep recession, itís now the banks problem, and not yours. If youíre new and I lost you there, subject to simply means the loan stays in the sellers name, but title transfers to you. You can learn more about this from the For Sale by Owner Cash Flow System and the Multiple Offer Strategies Boot Camp.
If youíre buying junkers to rehab, how many private loans can you get before you get cut off? All you want! You should always come away from closing with more than you need to buy and fix the house. So having enough money to buy a junker isnít a problem. The problem is lining up your lender or mortgage broker to get you the money, which you can do in a coma once you make up your mind to get it done and quit using money as an excuse to fail.
ďBut Ron, I canít find any private lenders or mortgage brokers that will work with me!Ē
Whine, whine, whine. Well hereís my response to that: bull! What you really mean is no one has come to you and begged you to take their money, so it gives you an excuse to be a lazy loser. Have you ever asked for money? How many times? What did you say? Who did you ask? Were they broke? Have you looked for brokers? If I put a pistol in your ear and gave you ten days to find a private lender or get exterminated, would you find the money?
Okay, forget private money and forget rehabs. How much money do you need to wholesale a house? You guessed it: nada! Well, maybe a $10 deposit to the seller. Can you raise that all by yourself? How much do you need to lease option a house and then sublease it to a tenant/buyer? You know the answer: none!
So letís recap for a minute. Taking over loans subject to on pretty houses usually requires no money from you, or, at most, a small amount. Yet you can immediately lease option the house or sell with owner financing and pick up $5,000, $10,000, $20,000 or more from a deposit or down payment, all within a few days.
You can also buy junkers and rehab them using private loans. Getting cash when you buy and sell, never spending a dime of your own money. You can also lease option pretty houses from the seller and sublease to tenant/buyer, picking up deposits in the thousands within days and huge back-end checks when they cash out.
Wait, Iím not finished! Donít forget about the bargains! Flip them to bargain hunters and make $5,000, $10,000 or more and never own the house. All of this with none of your own money or credit.
So I ask you, whatís all this crap about how you canít get started or get moving because you donít have the money? I think I made it very clear, money is not your problem.
Since I donít know you, I donít know whatís stopping you, but Iíll tell you what stops a lot of folks...grit, or the lack of it! No guts. Afraid of their own shadow. Going through life avoiding confrontation or pain. Canít grow because they wonít go. You wanna know who seems to do the best in this business? The people without money or credit, but lots of grit. And how do you get grit? Itís simple. You first suffer adversity and get beat up and kicked around awhile. Then one day you wake up and realize they can’t hurt you anymore and thereís only one way to go...up.
When you quit worrying about losing, you can start thinking about winning. You see, people with grit have learned to quit playing not to lose and begin playing to win. Does this mean you donít have grit if you havenít been to the bottom? Of course not. Adversity is not a requirement for grit. It just seems those who are the bloodiest seem to be more fired up and move quicker, with more passion. Theyíve seen the black hole and they donít want to go back.
Itís quite common for those who begin with money to leap before they look and spend money on stuff that doesnít produce revenue. Stuff like office furniture, computers, electronics and foolish advertising that wastes money. A smart entrepreneur will put their money in the bank and start their business on a shoestring. All the fancy stuff doesnít put a dime in the bank. In order to do that, you must make offers, and you should be making them without using your money or your credit.
Hereís a simple plan to do your first junker deal from your home using no start up capital (eliminating the risk). When you get that first check you can use some of it to get the things youíd like to buy to help you grow the business. This plan applies to you whether youíre dead broke and bankrupt or loaded with dough and canít wait to spend it.
1. Ride around and find 20 ugly, vacant houses. Copy down each address and get a photo. Youíll find them in the lower priced areas. Hereís a tip: you wonít find junkers in gated communities!
2. Call the houses with FSBO signs and see if you can buy them at a wholesale price of 50 to 60% of the after repaired value or less. Be sure to let the seller name the price first. ďHe who speaks first have big foot in mouth.Ē Call the Realtors on listed properties and get the facts. Make an offer if it makes sense. These will not be your best deals in todayís market and theyíll require bigger deposits, but can still be worthwhile. Track down the owners of the houses with no sign and call or visit them to make a deal. These will be the best deals, but require more work.
3. Persist with step two until you get a signed contract on an ugly house that excites you. This step is crucial and you must keep charging until itís done. If youíre broke, it should take about a week. If youíre loaded, it could take a year.
4. Have the title checked by ordering a title search from a title company. When you learn itís clear, move to step five. If itís not clear, go back to step one or two.
5. If itís clear, run an ad for three days in your paper that says ďHandyman Special, Cash, Cheap, 555-5555.Ē Put it in the investment property section.
6. Take the calls, tell them youíre asking price (which should be at least $5,000 more than youíre paying) and send them to the property. Build a buyers list in the process.
7. Meet the first person who wants the house at your price and get a $500 deposit and a signed agreement assuring theyíre ready to close within two weeks.
8. Set up a closing date with the title company and let them do a simultaneous closing. Pick up a check and celebrate. You also may simply assign your contract and get paid directly from your buyer.
9. Do it again.
Thatís it! Your first wholesale deal. Do you have questions? Of course. So what! Just go do it and use your best judgment. Will it go much smoother if you get trained first and are schooled on each step? Yes, it will. No question. But hey, you said you were broke and couldnít afford training. So just go make a mess and blunder your way through until you get a check. Then get the training as soon as you get paid.
By the way, Iíve had people do deals from just reading my book, others from attending my one day workshop, and still others from listening to just one tape they borrowed from someone. These are my kind of people. People who just do it and donít listen to dream stealers and broke morons. People who donít let any S.O.B. tell them they canít because they donít have any money or credit. People with grit.
|Ron LeGrand is a nationally recognized real estate expert and trainer with 25 years experience in both residential and commercial properties and a 20 year history of hard money lending and brokering. His experiences include personally buying and selling over 1,600 single family houses and completing over $300,000,000 in Commercial Property deals with student partners all over America. |
Heís obtained current real estate developments across America with market values exceeding two billion dollars, all under his control. His properties include office buildings, industrial, commercial, mixed use and residential land development, luxury condominiums, marinas, etc.
Mr. LeGrand is a highly sought after platform speaker whose addressed audiences as large as 20,000 and as small as 100 in hotels and convention centers across North America, sharing the stage with leaders such as Donald Trump, Robert Kiyosaki, Rudy Giuliani, Tony Robbins, Larry King, Dr. Phil, Suze Orman, and many others. For the last 20 years heís been helping thousands of ordinary people take their lives back and create financial freedom by implementing his systems for success as real estate investors. Today heís considered the countryís leading expert and is referred to by many as the ďmillionaire maker.Ē
His book is in stores and online and over the years heís created dozens of home study products, held live training events on various real estate related subjects. He spends much of his time passing on his experience at those live training events, held in various parts of the country, while simultaneously running over ten different business he owns and controls.
Ron LeGrand's 41 year marriage to his wife Beverly has produced four children, nine grand children, and two great grand children.
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