If you are a beginner in real estate investing then you may be out there trying to figure out how to get started in Real Estate Investing even in today's economy.
The questions that come to mind are questions like: How do I keep from making a big mistake? How do I make some money quickly? What is a good way to start? There are two ways that come to mind.
One is: being a bird dog and the other is: buying and selling mortgages on the secondary market.
Many beginner real estate investors start out as bird dogs.
This has nothing to do with flushing out a flock of birds or pointing to a bird.
It has to do with finding a property that someone else would want to buy.
Then striking up a good enough deal with the seller where there is a margin where you can get paid for doing your work and also someone else can still make some money fixing up and selling the property.
In big cities someone as a bird dog can make a decent living doing nothing else.
It is pretty much risk free but it does require some people skills.
I think everyone should develop at least a few people skills anyway.
As a bird dog, I suggest that you simply talk to some investors and find out what kinds of houses they would buy or what kind of property they would buy if the deal were right.
Get a description of what would be right.
Go by and go see things they have bought in the past that they are likely to buy the same sort of thing again.
You could go into the same neighborhood, get out of your car and walk around and talk to everyone that you can.
If you know how the people in that neighborhood dress when they are walking the dog or bringing in the newspaper, or watering their lawn.
You might dress similar to the way they look.
Be very casual.
You might carry a small notebook ...
something you could hide in a pocket with a small pen or pencil.
Don't look to alarming to anyone ...
be disarmed ...
leave your briefcase in your car.
Then, as you are walking around the neighborhood talking to everyone you can talk to, it would be a good idea to tell them what it is you're looking for ...
that you are an investor and you're looking for houses that need help or for people need help in selling their house or someone who is distressed and needs the money.
You would be really surprised, but most people who are just around the neighborhood are going to be extremely friendly to you, more than you would expect.
I can't tell you how many times I've been asked to come inside for a cup of coffee ...
or someone has brought a drink to me outside on the sidewalk.
They are as anxious for you to find that house as you are.
It's the beat up house in the neighborhood most of the time.
The neighbors don't like it because it is an eye sore.
They would love for someone you are affiliated with to come in and fix it up.
If you have pictures of a place before and after a project is completed ...
[that might come from the investor you are going to sell the contract to] you might take those with you.
You might show the people ...
here is some of our work ...
here is a before ...
and here is an after ...
for I can assure you that everything will be done in a proper manner.
Most people really appreciate that because you are taking an eye sore in their neighborhood and making it look better.
Some of the neighbors will point you to a house that does not look visibly distressed but the owner is.
But the owner needs to get out from under that house for various reasons.
Sometimes they have a child in trouble and need to pay an attorney.
Sometimes they are getting ready to retire themselves and are just tired.
A lot of times distressed owners don't want to mess with realtors.
They don't want to mess with showing the house.
Maybe one of the owners is sick and the other one is concerned about their health and worrying about the house is a big burden at that point.
Something they would rather not do.
All of these are great ways to buy.
Every now and then you will get pointed to a house that is owned by a bank.
Banks don't like owning real estate.
Some of my best purchases have been empty houses owned by credit unions.
They really don't have that much of a volume of real estate that they own.
They simply make loans on vacations and cars and boats and the like.
But every now and then they end up owning a piece of real estate for one reason or another and they are so happy to just get rid of it.
Owning Real Estate doesn't fit within what they do.
It's a pain in their side.
And somebody like you could come along and help eliminate that pain.
Meantime making sure that you are getting the right contracts signed is very important.
You will need to sign your name and right under your name you will need to add the phrase: "and or assigns.
" It wouldn't even hurt to have the investor you are going to sell this piece of paper to on the phone prior to you signing ...
letting them know what you are about to do and at what price.
They may very well tell you they are not interested in it.
Another hint, to make an earnest money contract legal in most states there does not have to be money involved.
Many times simply what is required legally is that the contract is to the benefit of both the seller and the buyer.
I've know of bird dogs who have actually purchased properties on an option to buy, so that they could back out in the event that their investor doesn't want that one.
Just because the first investor doesn't want that property doesn't mean that there are not others out there that would be happy to get it.
A good bird dog is going to have a list of investors and a list of potential houses to be bought.
Think of it, there is very little investment on your part except for time and perhaps some gasoline and a small note pad.
There are rewards to be made once you've got the deal to go through.
Most are paid at closing but being a bird dog is not like to go out and buying a whole house and hope you know how to get it fixed up to standards and be practiced at selling techniques that can help you sell the property quickly.
You would be learning one thing at a time and getting paid while you are learning.
The second good way to start is: buying and selling mortgages on the secondary market.
That is, being a note broker.
Check with your state to see that that's legal.
In most states it is legal because you are not a loan originator.
You are not selling loans to a large bank.
You are simply going to the courthouse or any other group of people where you think there might be owners of small notes.
You would just be finding a group of investors who have taken their money out of stock market who are anxious to recoup and make their money grow again.
You are just a middle guy, finding the notes for them and then selling those notes to someone who wants a high yield.
You would be surprised that people who have notes get tired of the monthly income and have decided they want one big chunk.
And now, there you are making that possible.
What a wonderful way to serve people.
As real estate investors we have some of the best jobs out there.
We get to help other people ...
and ...
we get to make money.