Money Isn't The Only Tool In Real Estate Investing

All right. Do you need a lot of money to get started investing in real estate? Well, short answer, no. Right? No surprise if you follow me. But I'm going to give you the answer that most people don't want to hear. If you don't have money, you're going to need something else. Right? And I'm going to call it in this particular week of Q&A, a skill. Because creative financing does not mean always necessarily no money, you know, no credit, no experience. It's not what we're screaming about. And no effort, right? And no clue. That's not what it means. And somehow we think it does mean that sometimes we magically start having houses fall in our lap. No, that's internet nonsense and social media nonsense and HGTV nonsense. Yes, I needed creative after the crash personally, as I literally had no cash and no credit. And despite being in business already 17 or 18 years at that time in the 2008 crash, I dove in deep to get more skills and even hired a coach for 6 months or so to learn the creative side. So let's clear this one up. If you're brand new, you've probably heard some version of you need 20% down, you need perfect credit, you need a bank loan, you need hundreds of thousands of dollars, you can only finance so much with banks. Each bank. Each bank. Well, that's true if you're going to buy every property conventionally. It's true. That's how I used to live. It was me prior to the 2008 crash. And that's not the way we buy real estate, and that's not the only way real estate gets transferred in general. People have been buying and selling property on terms, by the way, forever before banking. Owner financing, lease purchase, subject to existing financing once banking was around. And a whole bunch of other creative structures. Now, don't misunderstand me here. I want to be super careful because people hear creative financing, they think, oh, free real estate, right? No, not free real estate. There's always consideration, guys, and always nuances. So, I'm being careful what I kind of poke here. For example, are there closing costs? Yes. With sub-to and owner financing, you're going to have closing costs. Are there sometimes deposits? Yeah, sometimes when buying. Not the norm in our world. And if we do use deposits, we do so when we can grab some extra equity maybe because they want cash instead or just a better deal terms-wise, you know, further out. So there's a place for those for sure. But other costs that you might have, legal costs, right? Holding costs. I got a text this morning from one of my students and he said, oh my gosh, I didn't realize the transfer tax. He bought a house sub-2. And sometimes you absolutely should put money into a deal. We'll help you with this, but it just happens. I'm not teaching you to avoid investing money. I'm teaching you that money isn't the only tool you have. That's all. Terms is a tool, right? Knowledge is what? A tool. Problem solving? A tool. In fact, it's a huge one. It's what, it's what we bank on, so to speak. Relationships are a tool, aren't they? Here, let's do a simple example. Let's say that hypothetically somebody owns a property free and clear. And if you're new to our material, free and clear just means there's no mortgage, right? You can buy lists of these people. I love that list. Out-of-state free and clear is a great one. But let's say they want, I don't know, $400 grand. Maybe you've got $400 sitting around. Most don't. Now let's assume you don't. And if you do, how about you deploy that on maybe 10 or 15 or 20 deals, not 1? Another topic for another video. But what if you don't, like most people? Does that mean the conversation ends right there? No, of course not. You know where I'm going with this. Maybe that seller doesn't actually need the $400 grand tomorrow once you dig in. Maybe what they really want is income, steady monthly income, like the guy I bought my building from. It's all he wanted. Maybe they want their price. Most free and clear sellers do want a max price and they can wait for it. That's what's so cool about it. Some do it for tax planning, a retirement stream of income, or they simply don't want to manage the property anymore. That's the case with a lot of these. Now you've got a whole different conversation, right, from when I started at For Rent to Cash. And by the way, the commercial building I bought, the owner was free and clear. He insisted on not taking cash, wanted owner financing. Why? In his case, it was tax and estate planning, both of those. So when you're speaking with a free and clear seller, you'll just determine would they take some money up front, would they take monthly payments, would they take no money up front, maximize the price, and they take a balloon sometime down the road. My building was 20 years, a lot of the houses we do are 4 or 5. So with a seller, maybe yes, maybe no, but until you ask, you don't know. That's my point with a lot of these Q&A questions that come up. Let's do a second example just to mix it up a bit. Maybe The seller does have a mortgage. Maybe it's a super attractive existing loan percentage-wise. And by the way, as of this filming, according to the FA National Mortgage Database, about 67% of all homeowners with mortgages are paying less than 5%. Half are paying less than 4%. Those are out there for you to purchase. Okay, back to my example. So maybe the seller's issue isn't, hey, I need a giant check. Maybe their issue is more along the lines of, look, I need out from underneath this property financially. We get that a lot, sadly, right? Super common for the Smart Real Estate Coach family community. I'd say actually weekly. That's why I say it's— it can be sad too, right? You see so much of this. Potentially, there may be a subject-to structure here, and I'm being very general, so I don't know. Again, not every house, not every seller, not every situation That's why we teach you to do what? We teach you to diagnose before you structure. So what do you need if you're starting without a lot of capital, generally speaking? Well, number 1, you need to know how to find opportunities, right? I just quickly said earlier, well, you can buy a list of out-of-state free and clear. Okay? Number 2, you need to know how to talk to sellers, right? Makes sense? We give you all the scripts. We give you all the commonly asked questions. We give you all that. Okay, number 3, you need to understand structure. For example, we did a book, Deal Structure Overtime, where we go into structure after structure after structure, not to mention the Deal Structure Sundays on YouTube. Now, number 4, you need somebody looking over your shoulder until you know what the heck you're doing, right? Good news, I heard that we can help with that. We've got coaches with over 110 years of experience. And number 5, you need the guts to go ahead and take action, guys. Reality, right? Because you can have a million dollars in your checking account. I know I'm being a little bit facetious for the majority. Even the skills to speak with people. But if you don't know how to say structure the deal, there's your bottleneck. You're just an investor with a lot of money, and even you could have some skills, but there's a bottleneck with structuring. Could be a bottleneck in any one of these, and potentially a dangerous bottleneck, right? I'd rather have. Someone learn how to solve seller problems first and foremost, then capital becomes an accelerator for the right deal. Right? You find a deal where they need out and you can capture a lot of equity because of it because you know how to structure. I still operate today as if I have no money. None. Because when you learn to solve problems first, money is always optional. Always. So instead of asking, as I started this Q&A, hey, how much money do I need to start? Ask yourself next, what skill do I need to become valuable in a given transaction? It's a much better, more practical, more profitable question if you ask yourself. Because if you can sit across from the seller, understand what they're trying to accomplish and/or their pain point, and then create a solution that works for them and works for you, now you've developed something that money can't replace. Nobody can take that skill from you once you learn it. The ability to structure, nobody can take it from you. And the cool thing is creative real estate is what? It's a skill set. I didn't have it for my first 17 or 18 years. And that skill set can travel with you. It can be virtual. It can be in any market and it can be anywhere geographically. And again, nobody can strip it from you. So do you need some money in real estate? Let's go back to it. Of course, it's a business. But do you need hundreds of thousands of dollars sitting around in perfect credit all the time before you can start learning How to buy creatively? Absolutely not. That was the whole point. But the question came up, so it's worth hammering this home. Now, don't use lack of capital as an excuse for lack of action, as I alluded to earlier. Build that skill. Build it, build it, build it. I call it stacking the skill. Learn the conversations. Understand all the structures. Get around people doing deals. Most importantly, just start. For goodness' sake, just start. Because the person with the most money doesn't always Get the deal done. Very often, it's the person who can create the best solution. I see a lot of people come into our deal labs with no creative experience and money. And by the way, how would you like to become that person? You absolutely can, and you can crush it in our space. Now, how can you do that? Well, check out what it means to become an apprentice. There's no better way with us. Go to three paydays. That's the number three. threepaydaysapprentice.com forward slash YouTube, and let's get after this together.