|Can I Start With No Money or Credit? Is Flipping Legal
Yes you can, and yes it is! We detail how to start with no money or credit in our
Full Course. We give you real
workable techniques without any pie in the sky stuff. You will feel confident and legitimate employing
the techniques that we provide for starting with nothing.
This is a critical article to read if you have a strong desire to be a real estate
investor, but do not have any savings or income to operate on a conventional playing field.
Remember that to get a loan from a lender, all you need is cash OR credit. Thus, if you
have some money in the bank, or a 401(k) with some money, lenders will loan you money even with poor
to marginal credit. If you have excellent credit, you can get a loan with no money in the bank. Thus,
you only need credit OR cash to get loans.
Remember that after your first deal, you will have filled that requirement, as you will
have cash. (Don't blow that first $30,000 in a BMW!) The hard part is learning how to do that first
deal, and we teach you multiple ways to attack that problem that avoid making embarrassing or
If you have neither credit nor cash, and still want to operate on a conventional playing
field where you get loans for properties and pay all cash with no "crazy" no money down
TV seminar type offers, I have great news for you -- Hard money lenders. Most hard money lenders could
care less about you or your credit. They look to the property as their security. If you don't pay on
the loan, they know that they can turn around and sell the property for enough to get their money out.
We go into more details on this in the full course. We will give you a system to track these lenders
down in your town in our Full Course, will loan based on the property. If you strike a good deal, they
will loan 65% of the value of the property in renovated condition. Thus, if you find a home that is
worth $100,000 fixed up, and you can buy it for $60,000, the lender will give you 65% of the fixed up
value of the home, or $65,000. $60,000 of that will get you into the property for no money down, and
the extra $5,000 can be used for closing costs and/or repairs. You can then flip this property to
another investor for cash, or rehab it yourself for maximum profits. The great thing about these loans
is that you can typically close within 7 days. The only drawback is higher fees, but letís face it,
a few extra points on the loan to close is still cheaper than having a partner.
We detail still other techniques in the full course that will allow you to purchase any
type of property and flip it to another investor purchaser or conventional buyer. New for 2003 is a
technique that revolves around an innovative option strategy that creates a total "win-win"
for the seller. We call it our "Win-Win" Program. Signing up deals with this technique is
a piece of cake. Furthermore, if you have any interest in becoming a property wholesaler, this
technique will be the primary tool that you use to control properties that you flip to your wholesale
I started with nothing and leveraged credit cards to get into my first house, so starting
with nothing is something that I know about personally and can teach within the framework of the
present economic realities.
We do not teach the tired 70's stuff like discounted mortgages, taking people's cars to
make up the down payment, or any other nice sounding but unworkable theories. We will teach you how
to run a huge business without lenders at all, but I believe that eventually you should use lenders
as another tool.
A point on flipping: We have received questions from students as to whether or not flipping
is illegal. It is not. What IS illegal is taking a property, getting false appraisals through corrupt
appraisers, and over-financing the property with corrupt lenders. Once the property has had tons of
cash pulled out, the corrupt group would then walk away and pocket the money. The lender would be left
holding the bag.
That is not what we are about. Owning a property for a short amount of time and reselling
is completely legal, and the basis on which this economy is built. There is nothing wrong with owning
something for a brief period, using your skills to find a buyer, and reselling that property. People
do this every day in the stock market. Car dealers do it every day with cars that they buy and
immediately wholesale. The word flipping has attached to the illegal activities that you have probably
read about in your local papers, but owning for a short time, is not and never has been illegal.
The only problem that you will have is convincing the appraiser that the property you
bought last week for $100,000 is now worth $130,000. We have a DETAILED section in the full course on
how to make sure that the appraiser finds the correct value. In a worst case scenario, your buyer's
lender may require several appraisals to verify the increased value.
David Whisnant is a licensed real estate attorney in Georgia. He received his B.A. from
the University of North Carolina at Chapel Hill, and graduated from Law School at The University of Georgia
School of Law in Athens, Georgia. He is author of the
"The Complete Real Estate Investor
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