House Flipping | No Cash or Credit Needed!

If you know where to look and develop the proper mind set, there are plenty of real estate deals out there that you can put together without any cash or credit. I never put my own money into a deal. If it means taking money out of my pocket, I pass. Why risk it?

It’s not that I’m afraid I might lose it (I certainly won’t put a deal together where anyone will likely lose money). I just don’t feel the need to have my cash in the deal. And, with that mind set, I almost never do.

And credit? Everyone wants to know how they can invest in real estate with little or no credit. That’s the easy part. The people who sell their homes to me do not care in the least about my credit. It never comes up.

I never even think about acquiring new bank loans and, even when I bring in an investor, I don’t want him to be required to get bank financing either (I haven’t got the time to wait for his banker). Bank financing is more trouble than it’s worth and, with that mind set, I just never even attempt to get a new bank loan.

So there you have it. My deals take no cash, no credit. While you may think that limits the amount of properties available to me, it also has a tremendous focusing effect and allows me to target my marketplace. In doing so, I find more than my share of good deals.

Specialize in knowing where to look

How do I find more than my share of good deals? That’s where experience comes in. In simple terms, I know where to look. It’s like a fisherman who knows where to hook the big ones because he knows where the best fishing holes are.

And even if the big one doesn’t bite this morning, there are plenty of little ones out there to feed the family. That is, of course, if you know where to look.

I specialize in knowing where to look, and I stumble into a lot of good deals because I spend the majority of my waking hours stumbling around out in the marketplace.

If you know where the really good deals are hiding (and if you know what to do with one once you find it) you can believe that you’ll put together a deal or two yourself.

Finding and flipping houses

I closed on a property this week where the sellers in foreclosure needed only $5,000 to move into a new rental house. They owed $71,000, and the house (fixed up) is worth around $110,000. Once we’d agreed on the terms, I brought in a “fix-up” investor.

He paid the sellers their $5,000, and he paid me $5,000. I just got a check. He got the house, and the right to spend the next two months fixing it up. When he’s done, he’ll make himself a $10,000 to $15,000. That’s all he knows, and that’s okay.

I bought a burned-out foreclosure last month on similar terms. The seller was out of state and wanted nothing for his interest. I agreed to give him $100 anyway to make it legal. Another “fix-up” guy paid me $15,000 to introduce him to that seller, and he did the deal directly with the seller.

He’s fixing up that house now. He’ll spend four or five months remodeling, and he’ll make $25,000 or $30,000 on it. That’s fine, but that’s not something I want to do. Just give me the check, and I’m outta there.

This week I closed on a home I’d bought months ago from a woman in foreclosure. She had abandoned the property earlier and, although it was assessed at $90,000, it was in such deplorable condition that I could only sell it for $42,000.

Did I care? Well not much because she owed only $21,500 on it plus she was nearly $12,000 behind in back payments. And even though I did pay $600 to have all the garbage hauled to the dump, I never had to pay anything toward the mortgage. I netted a check for $5,200 for my efforts. I never lifted a hammer.

Do you see any big down payments or me applying for loans on any of these deals? Heck no. I don’t have the time or energy to spend three or four months baby sitting some project. I want to sign up a deal, get a check, sign up a deal, get a check, over and over and over…

By CREOnline Contributor

A content contributor to the original