What's up everybody? I am Jaspreet Singh and welcome to the Minority
Mindset. No-money-down-real-estate? Ugh. That's not even possible.
Buy real estate with no cash or credit? Ha. This must be a scam. Make money in real
estate with no license and no experience? How is this even possible? If you are
involved in real estate in any way shape or form, or you want to be involved in
real estate, you've seen the Facebook ads, you've seen the books, you've seen the
courses, you've seen the YouTube videos, but what is this no-money-down-real-estate
thing, and how is it possible for you to make money in real estate with no
cash, no credit, no license, and no experience? I mean, who doesn't want to
make millions with nothing? Well, you are in the right place because I'm going to
break down how no-money-down-real-estate actually works from my experience,
because I actually have been involved with these type of deals. But, before we
get into that, make sure you hit that thumbs up button below, right below this
screen, because it's kind of like a virtual high five. When you hear the
words no-money-down-real-estate, people are talking about one of two things,
First is wholesaling real estate. I got into real estate from the investment
side. I bought a small condo, and I rented it out. I love this whole idea of getting
passive income from investing in real estate, but, buying real estate is
expensive, and I realized if I wanted to buy more real estate, I needed more money.
That's when I went out, and I got my license to be a real estate agent. I was
working at a brokerage called, Keller Williams, and my boss happened to be a
teacher, who taught this thing called "real estate wholesaling", which I had
never heard of. Long story short, my boss invited me to one of her seminars where
I ended up paying thirty five hundred dollars for a course to learn this
no-money-down-real-estate wholesaling system. I am going to save you three days
of your time and explain how wholesaling works right here. So, in any given market,
95% of homeowners—when it comes time for them to sell their home—they will want
top dollar for their home. So they're going to go to real estate agents, and
they're going to decorate their home, and they're going to make it nice, this way they
can get top dollar. That's not who you're working with here. In any given market,
there's going to be a small percentage of people—maybe 5% of people—who will want
to sell quickly. they're motivated sellers. Maybe they went through a
divorce, or maybe they had a bad tenant, or maybe they had a job change. Whatever
it is, they want to get out of the home, and they want to get out fast,
so they will be willing to sell you their home at a deep discount. Let's say this
home right here is worth $100,000, and for the sake of this example, this
homeowner is very motivated, so you come in—so this hundred thousand dollars is
the market value—you come in, you find this home owner, and you enter into a
contract to buy this home for ninety thousand dollars. Now, you could buy this
home yourself if you wanted to, but that defeats the whole purpose of this
no-money-down thing. So, you enter into a contract to buy this home, and as soon as
you do that, you're going to turn on your marketing, and then you're going to market
this home to a new buyer for a higher price.
So you're going to find a cash buyer, like maybe an investor, who wants a
discounted home, and you are going to sell this contract to this new buyer for
ninety five thousand dollars. Now what happens is, this buyer comes in with
ninety five thousand dollars, and then ninety thousand dollars is going to go here
to this previous homeowner, and now this person is happy because they sold their
home, and they got their cash, and they got to leave, and then this person is happy
because this investor or whoever this person is, got to buy a home at a
discount, and then this remaining five thousand dollars goes to you as your
wholesale fee for putting this deal together. The best thing about this is,
you don't need to have a real estate license to do this in most places, and
you don't need a lot of cash to flip these properties because you're entering
into a contract to buy a home without the intention of buying it. And now when
you enter into a contract to buy this property, you get certain rights which
allow you to market this property for sale, and now you can essentially flip
this home to somebody else, but you don't need any money to do it because you're
not actually buying the property, and you want to have certain rights in this
contract saying that if you can't find a buyer, you can back out of the deal, this
way, you really have nothing to lose. The key for wholesaling to work is you.
You need to work if you want wholesaling to work. When I first started wholesaling,
I did not close a single deal for the first three or four months of me doing
this, and that was kind of rough because I was getting rejected again, and again,
and again. But the next month I closed two deals: the first one, I made $10,000
and the second one, I pocketed $7500, and that's when I
started to understand the whole process, and things started to pick up. You need to
find the right sellers who are ready to sell at a big discount, and you need to
find the right buyers who are ready to buy quickly. Both of these people exist
in every market, and this is where you can make your money if you can connect
these people. If you want to learn more about how you can start wholesaling real estate,
and how you can start doing this whole system, you can read: Cody Sperber, Clever Investors'
free ebook on how to wholesale real estate. The e-book is free, and you can download
it by clicking the link up here or by clicking the link in the description
below. I flew out to Arizona to meet Cody, who wrote this book, and I even walked
through some of his deals, so I know he's good. The e-book is free, and his company
has more advanced courses and programs that you can purchase—You're not required
to purchase anything but if you do, we will get compensated, but there's no
additional cost to you, so if you want to learn more about how to do this, I'll put
the link in the description below. The second way you can do no-money-down-real-estate
is, 100% financed deals. Let me show you what this means. So, let's
say you want to buy this property which is worth a hundred thousand dollars
again, this is the market value. So, you don't have a hundred thousand dollars to
buy this property, so you run over to your bank, and you say: "Bank, can you loan
me some money to buy this property?" So, the bank will do an appraisal, and they
say: "Sure, this property's worth a hundred thousand dollars, and we will give you eighty
thousand dollars, but not a penny more". So, the bank is willing to give you eighty
thousand dollars, but that means you still need to come up with another
twenty thousand dollars if you want to buy this property. At this point, you can
either come up with the twenty thousand dollars yourself, if you have the twenty
thousand dollars sitting in your account, but that would defeat the purpose of
this whole no-money-down system —or— you can go to this seller right here—this
happy seller—and say: "Hi Mr. and Mrs. seller, would you be willing to do a land
contract which is seller financing, and give me twenty thousand dollars in this
property? Meaning, a twenty thousand dollar loan because you have a lot of
equity in your property". Now, the seller is not going to actually give you a check
for $20,000, you're going to give the seller
this eighty thousand dollars, and then the sellers going to hold back a note,
meaning, you are going to have to start paying the seller payments on this
$20,000 that they are giving you through this property itself. So, they're not
going to give you the $20,000, they're just going to give you the property, but only
taking $80,000, and then this other $20,000 is a loan that they're giving
you through this property, and then you're going to have to make payments on
this $20,000. So now, you own this property, you paid nothing out of pocket,
but you have two loans. You have to make payments to the bank for this $80,000,
and then you have to make payments to the seller for $20,000. The goal here is
to rent out this property to a tenant, and then hope that the rent that your
tenant pays is enough to cover your property taxes, your insurance, your maintenance,
and then your loan payments to your bank, and your loan payments to the seller
including whatever interest you have to pay. I have been involved with
no-money-down-real-estate deals like this, but not as the buyer. I have been involved as the
seller, where I gave a buyer a land contract, where I gave them the property
without asking for all the cash upfront, and in exchange they had to pay me
interest for owning this property that I gave them. I've also bought a property
from a buyer who did this exact same no-money-down thing. They bought a property
with no money out of pocket, but they didn't know how to manage their property,
so they were bleeding money every single month, and they were so upside down on
all of their payments that they were a very, very motivated buyer, so they were
willing to sell me their property for 50 cents on the dollar. It's kind of like
that wholesale example I was talking about before. When I entered into a
contract to buy it, I could have flipped that contract and sold it to somebody
else, but I had the cash at this time and I wanted to buy this property for myself.
Can this no-money-down-real-estate investment system work? Yes. Some people
have done it very successfully. But I would never do this, because when I
invest in real estate, I invest for cash flow, not for a headache. The more debt
you take on, the more risk you have; so, if something
bad were to happen, you are much more likely to feel the effects of it. There's
more than one way to do real estate and you have to find the right way for you,
and if you want to learn more about how you can start investing in real estate, I'll put
a couple of videos for you to watch in the description below.
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