Zero money down real estate investing = rags to riches

Does Veeky Forums have an archive like Veeky Forums? If so, there have been some good threads on picking up properties at auction and foreclosure sales.

My instinct is to say that zero down is not real anymore. The successful real estate folks around here all seemed to have at least 20-30k to start out with.

Landlord here.

Zero down is a bit of a meme, but it really depends on what kind of deal you mean. Wholesalers do zero down all the time and you can make a reasonable living with that.

I wouldn't do zero down on a rehab deal.

For buy-and-hold, maybe. If it's a solid owner-financing deal a few years ago, maybe. Nowadays, ehhhhh, too risky.

Are you talking buy and hold, or buy and flip? Flippers who don't have startup capital aren't getting financed at this point, too much risk unless it's a really hungry market.

I have 6 units bought with low money down, but I had help. Here's some points I'd recommend.

1: Get to know your local banks and CU's mortgage teams. LOCAL banks and CU's, the guys you can go in, say hi, and sit down to chat with. I've been a member of my CU since I was a kid. It's a bigger one (just shy of $1b in assets and deposits,) and the director over the mortgage department is a friend I knew in HS. Why does this help? Short sales and aid in applications. He lets me know when they're about to lose one to default and he has helped set up 3 short sales. This saves you money.

2: Get to know some local real-estate guys. Again, not your big name guys (Century21, ReMax, etc) but the smaller players. Reason is just like your bank and credit union, they can become business partners. Two of my six have been normal buys based on this relationship (literally, a guy I'd been talking with for five years who put out his own shingle, I was his first buyer and it was a property he didn't think he could get rid of for any reasonable amount.)

3: Get a good management company, one that doesn't charge too much but has resources. The guys I go through handle every aspect of my rentals. They have an on-site maintenance and service team that's available to my tenants, 24x7, and I always get my money on the 15th (or the first business day after if the 15th is a weekend/holiday.) This will cut into your profit margin, but shouldn't be too much.

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4: Get to know other landlords in your area. The join the local Chamber of Commerce. This will earn you extra insight into the local market and may get you leads.

5: Get to know your tenants. As long as that profile does NOT violate the Fair Housing act, you're good (eg, race, sex, religion, handicap, family status, national origin.) The reason is as an owner, your tenants don't think about you. They see you as the back end of a landlord/tenant relationship, and only see the money. Getting to know the folks who live there, even a little bit, makes them feel good and puts a face to where that money is. If they trust you, or actually like you, they'll take care of the building more. For one of my tenants (been renting from me for six years now,) I even send their kids Amazon gift cards on their birthdays and we've had cookouts together. I've *never* had problems from them, and the house is kept immaculate (and if they ever offer to buy it out from me, I'd be tempted even though the profit from them is nice.)

For profiles? Pick out non-discriminatory economic factors that will insure your cash flow. Government jobbers (salaried, not hourly) tend to be more reliable. I rent mostly to military personnel (4 of my 6 units are this, and that one that I actually hang out with on occasion? He was a SGM on his final posting.) Troops will pay their bills because credit issues can get their security clearances pulled (but never threaten this, as threatening is a crime and bad juju anyway.) If you give them a "preferred employer" discount, they'll like you even more and that helps reliability. Also, if you're ok with renting to college students, go for post-grads. Less likely to have your home destroyed by John the law school student, versus Bob the guy majoring in Beer and minoring in English Lit.

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6: Don't expect to get rich overnight. My first unit only generated $2k in profit in the first year. After mortgage, management costs, taxes and other costs I only pull about $16k a year in fully actualized profit. I could bump my rates, but that can risk my long term cash flow, so I remain content with this modest amount. This is balanced against a real estate portfolio worth almost $800k, with less than $300k in remaining mortgage costs. In the long run, though, you'll make a shitload of money. My profits over 10 years have run about $250k, and again I could dump my properties and net another half-million. I'm only 35 and fully expect that this trend will continue for the next decade at least, with my profit margin increasing as the mortgages are completed one by one.

>>is it real?
After you read this you will think: no.

>Nowadays, ehhhhh, too risky.
too risky as the buyer or as the seller?

Hey thanks for all this senpai, good info

summarize it, user?

This photo has so much truth in it
>my old boss thought I was just not grateful
kek

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