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Getting Started In Real Estate With No Money

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Article by Zack Childress

Zack Childress, of Automated Real Estate Systems, has a widely diverse business background and experience in successful Real Estate Investments & Business Development. Zack’s Investment Company has been successfully operating for over six years, with a funding company for over three years, and a coaching program for over 4 years. He is always strategically developing his businesses based on market trends and cycles to stay ahead of the pack. When it comes to building a strong investment portfolio and ways to invest he finds the best deals out there using automation and the internet to grow his business.

Zack Childress has been inspired to share his success with others similar to him that wants to generate positive cash flow and increase their net worth through real estate investing. Zack has created systems through automation that allows him to generate five figures a month in positive cash flow. Most people in his position would retire but he has not, he still buys and sells real estate today in this turbulent market using the same systems he has mastered over the many years of investing.

To touch on one of the many systems Zack has created here is one on how to Start Making Money Now with Wholesaling. When Zack was starting out he didn’t have money or credit so he had to Wholesale his my into being a Real Estate Investor. So he has put a list of the 10 things you should do to get started has a Wholesaler in Real Estate . He has also created a powerful tool called the www.MLSGorilla.com that can mass market you business.

Get Focused On What You Want

You are starting a new adventure right now, and you need to have direction. Set your goals first so you know what you are looking to achieve with your new venture in Real Estate. As we all know our goals will change from time to time and that is okay, but you need to have a plan when starting anything in life? So, set your goals first so you know what you want as a Real Estate investor.

The second important part to starting any business is staying organized so you can get what you want. Staying organized will help you stay focused on your goals. Have you ever sat down at your desk and started a project without a plan of action and halfway into the project you find yourself working on several other things? You must have a system to get organized. A follow-up system is essential when investing in real estate. Prioritizing your projects is needed to become efficient and successful. A clean desk leads to a clean mind allowing you to focus on the project at hand.

Remember that this business is about motivating yourself to keep moving forward when times are tough. What 90% of investors do is quit when times are bad, and the reality is that you are just about to break through, and the fountain of money is about to pour down on you. I know it is hard when you are first starting out and you have not done a deal in quit some time. I remember when I started and my wife kept watching me write checks and not cashing checks. This is the part where you have to believe in yourself more than anyone else can even imagine is possible. You can and you will make it if you stay positive and keep yourself motivated no matter what challenges you may face.

What To Look For In A Wholesale Deal

You will want to segment your market so you know what the median house price is for single family residents; knowing this is a key part of getting started with your marketing efforts. So, you are looking for properties that are under the median price rang in you niche market. This will help you find more buyers, because they will be easier to buy.

You are looking for the most common properties on the market, and the properties that will have the easiest resale ability. You should be looking for 3 bedrooms with 2 bathrooms; these are hot properties for first-time home buyers.

Your goal is not to get rich on one wholesale deal. Your goal is to build a relationship with your investors. You need to make sure to leave enough equity in a property for the investor you are wholesaling the property to so that the investor will continue to buy your wholesale deals.

How To Get Good Comps

Accurate comparables are challenging to find if you do not know your search criteria or the neighborhood. Two people can look at the same comparables, and they both may have different After Repair Values (ARV); therefore, to get the best ARV possible you need to use both sold and listed comparables. The reason you want to know how much the comparables sold for and what the comparables in the area are listed for is, because you need to know what people are willing to pay for the property based on the sold comparables (market value), and you need to know what your competition is doing for when you put your property on the market to sell.

Your search criteria when finding sold comparables should consist of the following: 1/2 mile from subject property (1 mile if no comparables found), 6 months back (3 months in bad market), no variances in bedrooms and bathrooms; in other words, you want to search properties that have the same exact bedrooms and bathrooms of subject property, but if you are unable to find comparables with the same bedrooms and bathrooms of subject property then you can have a variance of 1 bedroom and 1 bathroom; meaning your search will show properties with 1 less and/or 1 more bedrooms and bathroom from subject property.

If you are unable to find accurate comparables you may need to contact a Realtor, and ask the Realtor for a Current Market Analysis (CMA). Provide the Realtor with the address and ask for a two-line CMA report which must include sold and active properties, Days on Market (DOM), bedrooms, bathrooms, square footage, address, etc. Let the Realtor know your search criteria such as to 1 mile from subject property, 3 to 6 months back, etc.

Setting Up Your Business

Setting up your business is one of the most crucial parts to this whole report. This takes you back to number 1, but you need to really drill down into this one. I know you like me have been to many real estate investing seminars were they sell you everything under the sun, the problem with this is you get so over whelmed that you do not know where to start or which direction to go. That is why you MUST find what you want and JUST do that. You will have greater results by mastering one thing in the beginning than trying to master 10 things all at once.

We hear all the time marketing is everything,; this is a very true statement. You must create a marketing budget and STICK to it. I do not care if it is $100 or $10,000; you need to start with something. You also need to drill your marketing down into one market at a time to maximize your dollars spent per lead. Also, you must get a tracking system of all the leads you generate, because this is the only way you will know if you marketing dollars are being spent correctly.

You need a good website that can help you track your visitors, and you will need an auto responder system to automatically follow up with your leads. Just send me an email and I can help you with the website and auto responder Get Web Sites NOW.

Finding A Niche In Your Market

I have to say this has been one of the secrets to my success. If you do this right you can dominate your market with little marketing capital. What you are looking for are areas that are 20 years old or older. This is where people have bought and they have seen the markets come and go and more than likely, they will have equity in their properties. These areas make a great wholesale niche market.

Now, for a lease option niche area you are looking for houses that are 10 years and younger. First time home buyers usually purchase properties in these areas; therefore, you will typically find motivated sellers and tenant buyers. Additionally, the homes are usually newer and do not need much work. You also want to work with realtors to find out what is selling and where the houses are selling. Take your local map and section off the areas that have the highest sales in that city or zip code. This will give you an inside look at what people are buying and where.

Direct Marketing

This is one of my favorites and one that I teach my students to do with virtual assistants. The industry may refer to it as gorilla marketing, but I call it just making as many offers as possible and one will come out in your favor. We use a system where we make 100 offers a week on properties between 45% and 60% of the after repair value. We can get about 1 deal per week doing this method; remember it is all a numbers game.

Another great tool is bandit signs, but do not put them up yourself; have someone else do them for you. Your time is valuable and best spent doing things more productive than hammering up signs. Keep in mind; you want the signs to be on highly traffic areas for the most exposure.

When I first started out I used many methods of marketing that was extremely inexpensive, and it would bring me in about 10 to 15 leads per month. I would put up flyers everywhere such as gas station, restrooms, local diners, businesses, and lumber companies, laundry mates, on the cars at the airport, cars at grocery stores, and many other places.

Mass mailing is another form of marketing and this I still do to date. The key is to get a copywriter to write your letters and your postcards. Alternatively, you can become a student, and we will provide you all the materials that have been improved over many years of testing.

Direct Lead Generation

You can find some great lead generation companies on the web, but be careful; these companies are not cheap, they can run you anywhere from $400 a month to $4,000 a month to have a specific county. They will sell you on per-lead bases for about $45 to $65, but these are the leads that the other investor who controls the county did not want.

Another great tool is using Virtual Assistants to drive leads to your website. I teach this strategy to my students only. You can research this strategy on the web to find yourself a virtual assistant to find motivated sellers for free through the internet, and have the virtual assistant put the leads into your follow-up system.

You can also post links to your website all over the internet to drive buyers and seller to you. A popular website that is free that many investors use is Craigslist. The key to posting on Craigslist is to have your VA post the ads for you. We can post about 600 ads in a good month.

Say No To Foreclosure Lists

You are probably thinking I am crazy; let me explain first. I like catching fish, what I do not like is fishing in a small pond with a lot of other fisherman. I hope that helps you understand what I mean when I say Say No to Foreclosure Lists. Many other investors are getting the same list, and the homeowners feel so over whelmed with new investors trying to strike it rich in the foreclosure market that I choose to market a different way.

Some other highly profitable ways to find motivated seller are through probate sales, bankruptcy filings, divorce attorneys, county code violation departments, and burned out landlords; just name a few.

Working With Other Wholesalers

Networking with other wholesalers in your market is a great way to get started in this business. You may want to joint venture with other local wholesalers that already have the properties available, because all you have to do is find the buyer and get a cut of the deal.

You can find other wholesalers through newspaper advertisements such as we buy houses ads, I buy houses ads, and they place ads that say handy man special. Become part of your local Real Estate Investment Associations (REIA); this is a great opportunity for you to surround yourself with like-minded investors that you could work with on future wholesale deals.

When you find other investors willing to work with you put an agreement in place so they will pay you a bird dog fee for bringing them buyers for their properties. You will have to work fast, because you want to find a buyer before anybody else does. I show my students how to find buyers over the internet with an automated system that brings the buyers to them.

Earned Equity Vs. Instant Equity

What you are looking for when it comes to wholesaling is a repair issue not a financial issue. This is where the homeowner has a property that needs repairs, they have not put any money down for a down payment, and they just want out. They have not earned equity in the property it was either instant or the property appreciated, and that is where the equity came from.

You will find your best deals were people have bought the property or inherited the property with equity and did not do anything to earn the equity.

Sell To Landlords Now

This is a great market for experienced investors to purchase properties. Right now most investors are buying properties to hold onto for rental income, and they are waiting for the market to go back up before they resell. These landlords are your buyers; go out and find them.

You can find your buyers many ways. You can either put an ad in your local paper or get a list from a list broker of investors that purchased properties in your area and put more than 10% down.

Remember To Hold Some Properties For Yourself

Why hold them you say, because this type of market comes around about every 10 years and you do not want to be sitting on the sideline 10 years from now kicking yourself for not holding onto some of the properties yourself.

As you build your wholesaling business and find properties to wholesale to other investors keep your eyes on the prize, and keep the best deals for yourself. You will get the capital you need to run your business by wholesaling properties you are not interested in keeping, but long-term holds will help build your long-term wealth; both these real estate strategies are essential to your success as a real estate investor.

I hope this was a good start for your wholesaling business. The next stage to your wholesaling business is to automate your business using the internet and technology; this will enable you to take your business to a whole other level, because you will have access to many buyers and sellers; you will get the exposure you need to become successful. There are steps to creating an automated real estate investing business over the internet, and I can show you how. Below are just a few things I can coach you to do:

  • Work to address the personal roadblocks keeping you from success
  • Find local and national resources that can be used online
  • How to wholesale in your own backyard and on a national level all over the internet
  • Create systems that automate your business
  • Find the best markets to flip properties and the hottest markets
  • Find motivated sellers and have them call you
  • Automate your lead generation
  • Get into any market and build your buyers list
  • Working with a virtual assistant at an affordable price to help automate your business
  • How to Mass Market your business and how to make 100s of offers in seconds

Zack Childress has previously spoken at a CT REIA seminar. Go here for the current list of upcoming real estate investing seminars in Connecticut.

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