How To Flip A House With NO MONEY | Flipping Houses 101

Let me tell you what the number one biggest myth in real estate is ready for it? It’s that you need money to get into the game. You need money to rehab flip, you need money to buy and hold rentals. It’s just incorrect.

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What’s up everybody. Welcome back to the science of flipping podcast. I’m your host, Justin Colby. And on this episode, we are gonna be talking about the number one myth of the real estate investing world and that is, you need money to get started, you need money to rehab flip homes, you need money to buy rentals, you need money, and it’s just not true. I’ve done almost 2000 transactions. Hopefully that record breaks here this month. And I have done roughly 600 rehab flips, I have bought 14 rentals, all of which I’ve done with little to none of my own money. Yes, in the last 15 years, there are deals that I have bought with my own money. I understand that but to get started, I didn’t. If you haven’t heard how I got started, let me refresh your memory. First of all, I was broke, busted and disgusted. I mean it like as broke as it gets the bank foreclosed on my home. I was sleeping on a friend’s couch, the repo man took my car, and I walked away from $40,000 in credit card debt. I mean, I literally had nothing, including no income. Now I knew I wanted to be a real estate investor and I was determined and committed to do so. So I was unwavering in my action. The intention I had was to become a multimillionaire, and here I am a multimillionaire, but I knew it was going to take time and a lot of action and so I just went to work. I quite literally didn’t know what I was doing. I had no coach, I had no mentor, I had no mastermind to be a part of, I had no money. And so what I did was I just started making calls to realtors, back in 2007. When the economy was really combusting realtors were the only was the only avenue that I foresaw that I could go out and get a deal.

Now, how does this all have to do with money and not needing any of your own money? Well, the reason being is while I was broke, busted, and disgusted, there was something called transactional funding, and it’s still around, it’s just not as prevalent. Well, that transactional funding helped me buy my first deal and resell my first deal all within about 48 hours, right? I didn’t need any of my own money, it roughly cost me two points of the purchase price, and I resold it for a $7,000 profit in my pocket. Almost immediately after I did the exact same thing, not a single dollar and I made another $7,000 that went directly into my pocket. Now that’s back in 2007. Nowadays, a lot has changed a lot different, but one thing remains the same. You don’t need money. Now, one of the things I’ve done over my career is I’ve raised private money, sometimes they are lenders, and then sometimes they are actual cash or capital partners is what I call them. So depending upon how they’re structured, they either get an interest rate just like a bank would or they actually get to come into my business and partner on the profit side of things as a capital partner. Now that being said, there is money everywhere the challenges in why everyone believes that you need your own money, it’s because they just don’t know how to go find this private money. Quite literally, it is everywhere. And one of the easiest places to find it is right here through social media. Some of you guys are watching this on YouTube, which make sure you’re subscribed to my YouTube because I dropped five videos a week. So I’m sure you guys are listening to this on iTunes, make sure you give me a five star review. Either way, social media has made a massive impact for me and for many of my students to raise capital. Now how they raise capital again, whether they raise it as a bank and you know private money as a loan, or private money as a capital partner, it’s really up to you up to me up to how you want to structure it. But that is just one way that you don’t need any your own capital. Now we also have hard money lenders more traditional hard money lenders now gone. Well I don’t want to say that. It used to be hard money lenders were really hard money meaning really, really expensive, like 18% interest. Nowadays you can range roughly from 9% to 12% is a really common hard money lender. While yes, it is more money than maybe what a bank would charge you. They don’t use your credit score, they only lend based around the asset itself. And you’re not really keeping the money for very long, you’re looking to rehab flip this property most likely, right? Or wholestail this property. So you’re really only looking to keep the loan maximum six months, right? Maximum. So it’s just about math. Now, these are money lenders typically will ask for 10 or 20% down now, right back to point number one. Private Money can be the bridge between the hard money lender, your downpayment and the rehab cost. So I tell you now, the number one myth is only because it’s how you are thinking about it, there’s nothing else involved. You just don’t know how to structure these things. So you think you need the money. It’s simply incorrect. You’re telling yourself a story that I need to have money to flip, or, you know, I don’t have good credit, so the bank won’t lend to me. That’s just incorrect, you just don’t know better. So you’re a victim of your own thinking, belief system and knowledge. Nowadays, hard money lenders actually will even lend on rentals. Now this is the craziest part. Because last year, I bought 14 rentals without a single dollar my own with a hard money lender and no, it wasn’t 12% interest and private capital partner. Now what that meant was there are certain hard money lenders and I don’t even know if I’d call them hard money, maybe they’re are soft money lenders at this point that do 30 year loans at roughly 5%. Now, yes, as I’m recording this episode, the interest rates are getting crazy. The Fed is spiking interest rates. And could this change depending upon when you watch this YouTube video or when you listen to this podcast? Yes, it could. But the reality is, even at 5%, a long term rental makes all the sense in the world when I bring in a capital partner, and yes, partner who comes in with me to buy these properties. We set up an LLC, we borrow from the hard money lender, and we’re able to buy 14 rentals all in one year without a single dollar of my own.

Again, this is where I just believe the biggest myth is not because people are lying or spreading a rumor. It’s because people just don’t actually know any better, they’re only able to think about what they know, which would be more traditional financing, like a bank that’s offered that needs money down. And things like that, where you wouldn’t be able to bring in a capital partner per se, to get a personal loan. This is a very viable business. I’m on a mission to make sure people are not one trick ponies. And what that means is wholesaling as an industry has been, you know, really blown up, there’s a big magnifying on magnifying glass on it. But really, you know, the vast majority of real estate investors are wholesalers. And the reason that is, is because it’s been highly marketed as no cash and no credit. You don’t need any of those to wholesale, totally correct. I wholesale roughly 10 to 20 homes every single month and I don’t need any cash or credit and I don’t need to buy the home. There’s no risk involved. It’s a brilliant business model. But I’m also rehab flipping, I’m also buying and holding at the same time with none of my own money.

I actually have an event coming up called the REI masterclass in Scottsdale, June 24th, 25th. Make sure you go to the REI masterclass, get a ticket. Hopefully when you see this, we still have early bird pricing. It is only for a week long. So hopefully, you are able to see this and listen to this, this week so that you can get the early bird pricing. But even if you don’t make sure you’re at this event, it is a live event, only 100 people in the room. And we are gonna be going over this idea of a active income business which is wholesaling, rehab flipping, because you need to be able to bring in a whole bunch of money so that you can have options on how you’re investing that money. So we’re gonna be going over how to raise private money. It’s gonna be a massive topic, how you can actually find the sellers? How you’re able to invest the money that you’re making? What are the right marketing strategies? How do we set up our pay per click advertising on Google? How do we set up our cold calling machine? How do we do this entire business? That is a seven figure year business with every single vertical including how to actually do Airbnb with little to no money of your own. Be at this event thereimasterclass.com it’s in Scottsdale Arizona June 24th, 25th. Make sure you get there thereimasterclass.com. Because this is my mission to make sure you guys understand. You don’t just have to be a wholesaler, you can flip, you can do wholetail, you can do Airbnbs, you can even buy and hold with none of your own money. It’s just about maximizing the opportunities that you give yourself. What I love about wholesaling traditionally is it’s really an opportunity business, find as many opportunities as possible. Specifically, you know, sellers, and then wholesale them off. Well, now I want you guys to really know and believe you don’t have to wholesale it, you might be able to flip it, or wholetail it or do innovation, do a sub to make sure you do an Airbnb or a long term hold, you can do any of it, because you’re simply maximizing the opportunities that you’re given. That’s why this episode is so timely and so close to my heart, because to this very day, after 15 years in this business, you know, 2000 transactions, almost 2000 transactions. Very rarely do I use any of my own money for any of these deals, and it’s because I just know better.

So if this made an impact on you, make sure you like it right here on YouTube and subscribe to the YouTube channel. Make sure you give me a five star review on iTunes. But even more importantly, guys, go to thereimasterclass.com. Get a ticket, meet myself, my team and some of the top experts like TJ Tajani, Amy Majori, Jamil Damji. We have some of the top experts in our space, gonna be teaching and speaking tactical information for you to build a seven figure a year active income business, so make sure you were there. I look forward to seeing you there come up to me and say hey, I watched your YouTube or listen to your podcast and that’s why I’m here. That would mean the world to me. So hopefully I see you guys there.