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1500 to 1 million in 15 months

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rc08234

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Hopefully Russ H doesn't mind me stealing his idea. I just got done reading the 3000 to 1 million thread posted a few years back. I noticed allot of the guys had ideas on how to do it with real estate which I have always had an interest in. I've never had the money or cahonies to get into it. It's time I break out of my shell, and get over this fear of being not taken serious because I'm young. If I can learn enough than I can use my father as front man for the first few deals till I get more comfortable. He would be more than happy to help me out.

Currently I have very limited cash. I have a couple grand in a futures account that I would like to keep there but if worst comes to worst I can close the account and use that. (For all the people that said "trade stocks/commodities" in the old thread probably havn't day traded a day in there life.) Trading is extremely hard, but thats a different thread entirely. My ultimate goal is to own a ton of section 8 houses, but thats going to take some cash to do it. I live in Atlantic County of NJ and there is no shortage of people needing section 8.

So, if you could how would you turn 1500 into a million with real estate how would you do it?

Guidelines:

22 years old
1500 dollars
LITTLE TO NO real estate experience
Unlimited time
Good learning resources (I have a few torrent sites where I can learn a ton on RE)
Doesn't know anyone.

The main point of the thread is to get some kind of direction. I don't have anyone I can talk to about it or learn from, but like I said I have unlimited time, and some good resources. There are just so many directions I'm not sure where to start. Birddoggin, wholesaling, REO? I don't really have a clue. Also if you would like to add how you got started that would be great. Thanks!
 
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Iqen

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Hi,

Though I see many of these threads, I think you would do better to build your goals from a thoughtful business plan. This will give your goals more weight

I recommend the book 'Business Model Generation' for this purpose. Great book for learning the underlying fundamentals of business.
 

Runum

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If you want to do this from real estate only then you are going to have to use multiple plans simultaneously.

You will have to start by birddogging and buying options.

Add in a few mobile homes to flip.

You might then buy a few rentals.

Then graduate to some fix and flips.

Buy larger projects to improve and sell.

Become a developer and syndicate some deals with you being the point man.

In order to reach the 15 month time limit you would have to be doing most of these at the same time. You would have to average $66,667 a month of profit during this time. I won't say it's not possible but not many REI pro's make that kind of money after years in the biz. You have the opportunity to break the mold. Good luck.
 
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rc08234

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The 15 month thing was just a time frame I got from Russ H's thread, it doesn't has to be that strict. Thanks for the response
 

kwerner

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I remember reading something MJ wrote a long time ago on a different forum and basically, it said that if you had to make $10m in 10 years the best chance for you to do it is to create a business that sells a product or service to millions of people, real estate would take too long.
 

InMotion

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Agreed, RE takes too damn long. Its a cashflow business and takes years and years to build to a sizable amount especially without growth, generally speaking; it doesnt fit into the fastlane model. But if its in your interest go for it. The vast majority never reach a point of financial freedom so its still an impressive milestone at any age in my opinion.
 
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Dhappy

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I agree.. You can make a good living,but getting rich in it takes a long time. I have not been on this site for a long time. Im still living off real estate,but not even close to the kind of life I want. I'm about to change roads and start new as MJ says in his book. I love the book. I read it cover to cover the first day I got it. Page 208 hit me good and hard in the face. Its time for a change why Im still upright. I'm 47 now and going to reinvent myself and find a way to help others on a grand scale.
 

kwerner

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Hey Dhappy good to see you on the forum again! Welcome back!
 
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hatterasguy

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First slow down a bit. Try to do your first deal and make something. The big money will come but not at first.

Also I wouldn't touch low end rentals after seeing what another investor I know went threw with them.
 

Yussef

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Find your local realestate investors association and start attending meetings.

Sent from my ADR6400L using Tapatalk


No offense but these are the last guys I would ask how to invest in real estate most of them have employee mentalities and just because they work around property all day doesn't mean they know how to get wealthy in it. Just like all cooks don't know how to own and manage a restaurant even though they are around food all day.
 

PatrickP

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Well rc08234 what my friend and I did, I was 20 years old and he was 18 years old and we had $1000.

We just found houses that had been vacant and were NOT for sale. Found out who the owner was and offered to buy the house with $500 and $500 a month on a land contract which basically they don't sign over the house until we pay it off.. We got our first house about a week later for $25,000.

We fixed it up and sold it via a realtor and made $10,000.
 
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PatrickP

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I remember reading something MJ wrote a long time ago on a different forum and basically, it said that if you had to make $10m in 10 years the best chance for you to do it is to create a business that sells a product or service to millions of people, real estate would take too long.

I think it would be easier than that.

Probably only need around 20,000 people you sell a few products to per year for 10 years.
 

rc08234

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Just an update on this, over the last year I have done absolutely nothing with my life. I refuse to call it depression, but a few circumstances lead to lack of motivation due to emotional weakness. Either way I'm back on track and learning again. Found a job, paid off a SERIOUS credit card billed and began saving.

Now that cashflowdepot is back maybe she can shine some light on this. Also I'm looking into your website subscription once I get a few more dollas saved.
 

bophisto

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Congrats on paying off that credit card and saving.

I think real estate can be fastlane , it can be scaled.

Also there are more people that became millionaires from real estate than nearly anything else.

A lot more become rich through real estate versus creating internet business,etc
 
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Pete799p

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Congrats on paying off that credit card and saving.

I think real estate can be fastlane , it can be scaled.

Also there are more people that became millionaires from real estate than nearly anything else.

A lot more become rich through real estate versus creating internet business,etc

The thing about real estate is that it can be a business or an investment or both. If you approach the problem of how to make ten million dollars in 10 years with the I am going to buy one house and rent it out approach it wont happen without an already large existing income. However, if you approach it from an entrepreneurial I am going to build a business approach it can generate lots of cash. Its all about what you are doing in the real estate space. It theoretically has low barriers to entry but the devil is always in the details and somebody who knows those details will out perform those that don't.

And do not look for those details in a 2day seminar because if anything "secret" was revealed it would no longer have any advantages. To get them you are going to have to either lose a bunch of money or get really dirty. :)

Also the words passive and real estate when approaching it from a business stand point do not belong in the same sentence. At least not in my book.

Finally, if you plan to make money in real estate without any cash you have to know something or someone that somebody else doesn't.
 

CashFlowDepot

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Getting a million dollars in cash flow will take time... and 15 months is unrealistic.

With real estate, it's better to start with options that you wholesale to other investors. If done right, there is NO RISK with this so you don't have to worry about losing your $1500 or any of your Dad's money. What you'll gain is experience, confidence, the ability to "know the market", learn how to estimate repairs,

I did 40 of these deals my first year in business and made an average profit of $5,000.

It's not big money, but it beats the heck out of working at a job. Since I was a stay-at-home-Mom prior to this, I felt like I'd won the lottery.

After you get confidence in your ability to spot a great deal, negotiate, and estimate repair costs, then, and only then should you start buying houses to rent out ( more about Section 8 later)

But, instead of borrowing money from your Dad or getting bank financing, seek out properties you can buy with seller financing. Often you can negotiate to buy with 0% financing so that means the house will be paid off quicly.

Or, instead of buying just master lease! That means you lease from an owner with the right to sub-lease to another tenant. You don't kown the house, which means, you don't have liability or the responsibility for repair costs ( when the air conditioner breaks) but you do get the cash flow. I know many people who have created $8,000 a month in income in less than 2 years using this strategy.

Now... let's talk about Section 8 housing. Do you realize that you are perpetuating the entitlement mentality by playing in that game? The entitlement mentality is killing the United States. Too many people want something for nothing or the government to take care of them. (One of the things I love about Panama... the entitlement mentality does NOT exist)

Do you realize that the federal government is in debt up to it's eyeballs and at some point will have to say we can't afford section 8 housing anymore... when that happens, where would you be with a lot of housing and no tenants? I've bought many properties from Section 8 landlords - even an entire portfolio - because the tenants tear up the houses and there will be high turn over which means more management. Section 8 landlords have a high burn out rate even when their properties are professionally managed.

What little cash flow you get will be eaten up in repair costs. And NO, the government does not do the repairs for you.

You'd do much better getting median price range houses which you rent to people who work for a living and can afford to pay ALL their own rent. They have more respect for the property and you'll have less hassles.
 

Kak

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This is not the proper way to set goals. I used to set stupid goals like this. I used to say I wanted to close 3 big fish this month. Wouldn't happen. One day I asked myself... What do I think I have to do to get 3 big customers this month on a daily basis? Prospect to 30 people each day was the answer in my head. I set the goal to prospect to 30 people a day for a whole month, regardless of the outside factors or result I could obtain my goal. Guess what... it worked and I have been setting goals like this ever since. I have a few new reps working for me now that I am teaching this to.
 
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GlassCannon

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Nice having you back here. I know how hard it is to stay on track - you're all motivated then time passes, none of your peers are doing anything particularly exceptional, and you slip back to autopilot. Happens all the time.

I've been investing in real estate for about 8 years. I've been through the boom, and I can say that leads and deals are not out there like they used to be. Some of the people giving advice are talking about things that used to work when times are good, but aren't working so hot right now. Maybe that's just in my area though, but I suspect it's similar everywhere. Here's why I think that is:

-During the boom, it was decently tough to get deals, but very easy to resell them (retailing, wholesaling, birddogging, whatever). Now with prices going backwards or staying flat, it's very difficult to sell deals at a profit

-Foreclosures and short sales used to be a big thing, but now banks aren't really foreclosing (partly because there are just way too many cases to process) so people have figured out that they can just not pay their mortgage and aren't in a rush to leave.

-With prices going down, very few people have any equity anyway so it's hard to get good deals

This has been my experience, and I've tried just about every avenue of real estate investing. I've done multiple wholesale deals from $500 to $27,000, one time buying/reselling 7 properties at once from the same guy and wholesaling them all on one day. Those days are gone though, and I'm struggling to sell 3 of my rental properties that are very conservatively priced. And let me tell you - tenants suck! No matter how hard you screen them. They are always late with payments, stuff always breaks, they always want pets and buy more pets, etc etc.

Lately my strategy has been to buy vacant land for cheap and resell it with owner financing. It's created a fairly passive income stream but again, it's slow going. You can check out my site at FindCheapLand. If you have any questions about anything I've said send me a PM, I'll try to check this thread but I'm not on the forum too much.
 

CashFlowDepot

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Bobby

If you're selling land in the United States, did you know the federal government put a limit on how many times a year you can sell with seller financing. 3 times in some places, 5 in others.

Another reason I GOT OUT... too many rules, regulations, and restrictions which hurt business.





Nice having you back here. I know how hard it is to stay on track - you're all motivated then time passes, none of your peers are doing anything particularly exceptional, and you slip back to autopilot. Happens all the time.

I've been investing in real estate for about 8 years. I've been through the boom, and I can say that leads and deals are not out there like they used to be. Some of the people giving advice are talking about things that used to work when times are good, but aren't working so hot right now. Maybe that's just in my area though, but I suspect it's similar everywhere. Here's why I think that is:

-During the boom, it was decently tough to get deals, but very easy to resell them (retailing, wholesaling, birddogging, whatever). Now with prices going backwards or staying flat, it's very difficult to sell deals at a profit

-Foreclosures and short sales used to be a big thing, but now banks aren't really foreclosing (partly because there are just way too many cases to process) so people have figured out that they can just not pay their mortgage and aren't in a rush to leave.

-With prices going down, very few people have any equity anyway so it's hard to get good deals

This has been my experience, and I've tried just about every avenue of real estate investing. I've done multiple wholesale deals from $500 to $27,000, one time buying/reselling 7 properties at once from the same guy and wholesaling them all on one day. Those days are gone though, and I'm struggling to sell 3 of my rental properties that are very conservatively priced. And let me tell you - tenants suck! No matter how hard you screen them. They are always late with payments, stuff always breaks, they always want pets and buy more pets, etc etc.

Lately my strategy has been to buy vacant land for cheap and resell it with owner financing. It's created a fairly passive income stream but again, it's slow going. You can check out my site at FindCheapLand. If you have any questions about anything I've said send me a PM, I'll try to check this thread but I'm not on the forum too much.
 

CashFlowDepot

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1500 to one million sounds great...and a lot of real estate gurus throw out these big numbers to entice people in to their high priced seminars and home study courses.

what a lot of people don't realize is that the million dollars in real estate is NOT cash or equity.

If you own ten $100,000 houses, you have a million dollars in real estate. Makes for good bragging rights... but

...but if you have debt on any of the houses, your REAL equity is reduced by that amount. ( this is the part the RE gurus don't talk about)
 
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andviv

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Lately my strategy has been to buy vacant land for cheap and resell it with owner financing. It's created a fairly passive income stream but again, it's slow going.
Bobby, I really like your strategy... I may even buy one from you!

If you're selling land in the United States, did you know the federal government put a limit on how many times a year you can sell with seller financing. 3 times in some places, 5 in others.
I had no clue about this... who regulates this?

I am sure this can be overcome by having a company doing it, instead of doing it as individuals. No?

I'd love to read more about this one. I tried googling it but couldn't find it...
 

Rickson9

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Hey Jackie do you have any contacts in Canada who are doing RE options? Thanks!
 

NJRealEstate

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However, if you approach it from an entrepreneurial I am going to build a business approach it can generate lots of cash.

As a somewhat new investor having worked with others on a few flips and a few tear down and new construction homes, finaly graduated to buying a flip on my own dime, this is great advice.
Write a real busines plan for what your goals are. Work back from your goal, and see what steps you would need to take to make X dollars or generate X in cashflow monthly. This will help to focus you on short term goals that you can achieve, and use that momentum to help you snowball into bigger and bigger deals. Its ok if the plan is not perfect becuase you can always modify it as you go. A plan will give you something to build on.
I recomend saving up as much cash as you can in the short term so you can afford to do your own deals. The developers on this forum can tell you better than I cash is king in this business.
 
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PatrickP

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Bobby

If you're selling land in the United States, did you know the federal government put a limit on how many times a year you can sell with seller financing. 3 times in some places, 5 in others.

Another reason I GOT OUT... too many rules, regulations, and restrictions which hurt business.


Can you link us to any info about that?

I have never heard of anything like that before. My friend actually has sold over 50 pieces of land in the past 5 years and held the note on each one.

Just doesn't sound logical for so many reasons.
 

wade1mil

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Can you link us to any info about that?

I have never heard of anything like that before. My friend actually has sold over 50 pieces of land in the past 5 years and held the note on each one.

Just doesn't sound logical for so many reasons.

I agree.

Also, what is stopping someone from using multiple land trusts or LLCs/Corps to sell more than 3/5 times a year with owner financing?
 

CashFlowDepot

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it's called the SAFE act -- don't remember what the stupid government acrynom stands for. But it limits the number of seller finance real estate deals you can do a year (3-5 depending on your state) and also requires that you use a mortgage broker to explain the terms to the buyer, take their application, etc. You cannot do this yourself unless you are a licensed mortgage broker.

More government rules and regulations to try to stop a successful real estate businesses.
 
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PatrickP

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Few things.

I believe it was DOdd Frank bill that made those requirements which added on to SAFE Act.

As you say different states have different rulings and most I see pertain to houses not land.

You just use a land contract to avoid the safe act then no problems.

Or you can pay a mort company to write up the owner financing and youdo the owner financing for approx $450 which of course you can charge the buyer, then you can do as many as you want per year. If you do more than 5 per year you can usually get a discount.

I think when the govt makes a new law to make things harder on businesses it actually increases the number of businesses out there lol
 

ChickenHawk

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Now... let's talk about Section 8 housing. Do you realize that you are perpetuating the entitlement mentality by playing in that game? The entitlement mentality is killing the United States. Too many people want something for nothing or the government to take care of them. (One of the things I love about Panama... the entitlement mentality does NOT exist)

Do you realize that the federal government is in debt up to it's eyeballs and at some point will have to say we can't afford section 8 housing anymore... when that happens, where would you be with a lot of housing and no tenants? I've bought many properties from Section 8 landlords - even an entire portfolio - because the tenants tear up the houses and there will be high turn over which means more management. Section 8 landlords have a high burn out rate even when their properties are professionally managed.

I'll second this on all fronts.

To follow the original logic, it's true that many more Section-8 people WANT housing than can get it, but I'm not sure that's a good basis for focusing on this type of rental system. Free stuff is very popular, until, as they say, "you run out of other people's money." And those who get something for free very rarely care for it than those who have a vested interest.

We've owned rental property (not a lot, but some), and I wouldn't touch Section-8 with a ten-foot pole. My husband is an electrician, and he's done some work on these properties. It's not pretty. The lack of care taken with these properties is staggering. Plus, since many of these tennants don't work, they have more time to tear it up, even in terms of normal wear-and-tear. And the neighborhoods "lucky" enough to have Section-8 homes invade their streets often learn to regret it, even if they first welcomed their "less fortunate" neighbors with open arms. The lawns and shrugs go to pot, garbage piles up in the front yards, and more people occupy these places than those whose names are on the lease. As a landlord not living in these neighborhoods, this seems a far-off problem, until the neighbors start calling the city, etc. to complain.

All this to say that while an apparent customer-base might be demanding this housing, I'm not sure the market consists of actual consumers, since they're not actually the ones paying the bills.

A friend of mine owns a TON of rental property. He told me the most interesting thing. He said his most expensive properties, meaning those that rent for $1,000-$2,000 a month always pay on time with little or no trouble. It's his affordable to mid-grade properties than he has problems with. I know that Section-8 housing is paid for in a different way, but I sometimes wonder how long the system can sustain itself. And if the government stops subsidizing this, these won't be properties easy to rent to others.

Plus, as others have said, real estate can be a long road, certainly not as quick as the "impact millions, make millions."
 

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