It takes money to make money, right? Wrong! This video reveals a closely guarded secret that many professionals keep to themselves. Learn hwo to become a house flipper with no money and bad credit!
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Why Now Is A Good Time To Invest In Real Estate
Joe: Hey, it’s Joe Crump. This next question is, “Joe, how do I become a house flipper with no money?” Well, the conventional methods for flipping houses that everybody has in their mind is you go out and you find a property, you get a good deal on it. You go in there and you rehab it, you fix it up, you bring the value up even more. You turn around and you sell that property and you make a profit.
Joe: And that’s a great way to flip property. But it requires that you fix up that property. And fixing up a property requires capital. Everything else that we do, though, doesn’t require any money at all. Finding the property, buying the property, selling the property, those are all things that you can do without spending any money at all. Zero down, zero credit. You don’t need to use a bank. Use seller financing. Using subject to, multi-mortgage, land contract/contract for deed, assignable cash deals and lease options. And if you’ll use those structures you can flip properties all day long.
Joe: One of the things I’ve talked about on previous videos is the For Rent Method of buying and selling properties on a lease option. So, you get control of a property on a lease option, you become a principal in the transaction and then you turn around, raise the price, sell it at a profit, take the down payment, you make your profit right away. You’re in and out of the deal – it goes directly to the seller. Now the deal is between the buyer and seller. You made your profit, you’re out of the deal. You never came up with any money, you never came up with any credit. That makes it really easy to do.
Joe: So, that’s how you can flip these properties. And you can do that with subject to’s where you buy a property subject to and then you turn around and sell that property on a lease option. So, you keep control of that property, keep it in your portfolio, it’s still a flip. You sell it to somebody else. Or, let’s say you find a property that’s in terrible condition. And you want to flip that property but you don’t have any money to fix it up. It’s a great deal. You’re able to get it on terms. Maybe get it on a land contract with zero interest.
Joe: So, you bought it for $50,000. It’s worth $100,000 if it’s fixed up and it needs $15,000 to fix up that property. And you can get it for $400 a month payment that goes entire towards principal which is great. You want those kinds of deals because they pay off three times faster than a mortgage with interest. So instead of 30 years you get paid off in 10 years or less.
Joe: So, you have a property like that. But you can’t fix it up yourself. You can turn around and sell that property on a land contract. So, you can buy it on a land contract and then sell it on a land contract to somebody else as long as you have the right to do that on your original land contract. And let them do the work. Or, they could just take over the land contract that you bought and pay you an assignment fee to do that as well. So, you could flip a property easily that way.
Joe: Now, most of what we do is selling a property on lease option because we want to keep the properties for the long term and lease options are less likely to be exercised plus you still get that property and the values go up and if they don’t exercise the option you can sell it for more money later on.
Joe: But, if the property’s in terrible condition and we don’t want to fix it up, then you can sell it on a land contract. If you sell it on a lease option, it has to be habitable. But we have properties, I bought a package of properties where I bought 20 or 30 properties that were in Cleveland and Detroit and a few other challenging areas. And we bought them for $500 apiece. I then turned around and sold them on a land contract with $1,000 down and then $300 a month payment with a total of $20,000.
Joe: Now, these houses, a lot of them didn’t have front doors, they didn’t have any wiring. They didn’t have any furnaces. Everything has been stripped out of these properties. So, we pretty much got all of our money back, plus double our money by selling them right off the bat. And then they started making payments on them. Now, not everybody continued to make their payments. I had one guy that stopping his payments, we were going to evict him and he burned down the house. But we didn’t lose any money because of it because we’d gotten our money back from the initial down payment from the property.
Joe: So, sometimes you can do that. You can find a property maybe for $10,000 and then turn around and sell it for maybe $40,000, get $10,000 up front, get all your money back and then start getting payments on it until that property is paid off. And if they don’t pay it off, if they default, most of the time they won’t burn the property down and you can take it back and you can sell it to somebody else. And maybe by that time you’ll have some money that you can put into the property and fix it up and turn it into a nice property.
Joe: I like to make all my properties nice. I don’t want to be a slum lord. I don’t want to own junk properties. I hated that, when we bought those properties, I hated owning those properties. And so I don’t do that anymore. But, I know a lot of people that are doing something similar to that and they’re having good luck with it. And it’s not a bad opportunity for people that want to go in and fix up the property that have the skills to go in and fix up the property they live in. It gives them a way to buy a property that they could not have bought otherwise and they can find materials and things like that, because maybe they’re in the contracting business so it makes it cheaper for them to do that, those fixups. And they can find a place for their family.
Joe: So, there are some real advantages to the people that you’re selling it to, and advantages to you as far as being able to make a profit.
Joe: All right. I hope that answers the question.
Joe: Got to JoeCrumpBlog.com and sign up for my free newsletter. And PushButtonAutomarketer.com is my automation system which will help you find leads so that you can do these kinds of things.
Joe: All right. Good Luck.