How do you buy real estate with no money and no job? Specifically, $350,000 worth of real estate with no money and no job.
We always tell this story over and over again with friends, family and at networking events. So we wanted to share with our viewers how we bought $350,000 worth of real estate with no money and no job.
So how did it happen?
Well, John heard about wholesaling back in the middle of 2018 and he thought it would be a good way to get into real estate. He worked for nine months on his first wholesale deal... getting it under contract, driving out to show it to people, and marketing it. Finally, he got it sold nine months later and made a couple thousand dollars, so not a whole lot of money. But what he did with that money is the important point to key in on. John used that money as an earnest deposit on a portfolio of properties.
We found these properties by writing letters. We wrote letters and got them under contract and went about trying to figure out how I was going to buy $785,000 worth of real estate with no money and no job.
So like any rational person would do, we started exploring all avenues. We went about finding any creative way so I could to purchase this portfolio. We started off by with my friends and family. We went through our contact list went through our contact list. We made a list of anybody that we knew and had any decent relationship with whether they have money or not. We started talking to them to see if they'd be interested in partnering and investing in the portfolio. We probably asked two dozen people if they wanted to invest in this first deal of ours and got twenty one "No's" but we got three yes's and that was all it took. All it took was 3 yes's to piece $170,000 together. We structured it as a loan. We didn't sell Equity or anything.
I didn't really include much rehab budget in there. I was just trying to get what we could get. We had $170,000, which was supposed to be the down payment for the whole $780,000 package.
We went to Banks started loan process. We found a bank that was so willing to do it for us, almost too eager it seemed, to start going about the process. While we finished raising all the money, we told them we had it all and that we were ready to close.
The loan was declined 5 days before we are supposed to close in April, but nonetheless I got up the next morning and I got on the computer. I called every single hard money lender on the Bigger Pockets website.
We talk to a bunch of people. I learned a whole lot about hard money lending. Connected with someone in Texas at a company that turned out that he was the son of the seller who is living in Florida. I thought it was serendipitous that he was going to help us get this this deal and was trying to help us close his Mom's property.
Well, it turned out that he was not as transparent as we thought. He was not submitting our loan requests. He was not communicating with us, rather he was talking to his mother convincing her out of doing the deal with us. All said and done a month later, she tried walking from the deal, even though we were trying to close with a bank when she denied the appraiser and then cash which she refused to sign.
I was faced with a choice there after we were now at least five months into this deal. Hmm either walk and start over or get a lawyer and just see if we can get something done.
We have Part 2 coming tomorrow
Check out our video of this by clicking here