Acquiring properties depends on whether you have money or not. If you have money it can make things easier, but it is also easier to make big mistakes as you are learning.
Act as a Finder / Bird Dog
If you have little money, one way to get started in real estate investing is to find property for investors with money and get paid finders fees. Some will pay $500 per deal, others will pay some sort of percentage. Some investors are real tightwads and others are more generous because they want you to keep coming back with more deals. We have heard of some investors paying finder’s fees of $1,000, $2,000 and even $10,000 for a really good deal.
Another method you can use is wholesaling. This is a bit riskier than acting as a finder. In this case, you find a good deal and put a contract/offer on it and then sell the contract to an investor. This requires that you know what a good deal is. You need to find a deal that not only has enough profit margin for the investor but enough for you to make some money as well.
Why would an investor pay you a finder’s fee or buy a contract from a wholesaler? Time. Frequently, they are so busy arranging for the contractors and then selling that they don’t have enough time to find deals. All aspects of the process take time and resources. But also, if you bring deals where they can make money based on the criteria they are searching for, they don’t care whether they found it themselves, a real estate agent brought it to them, or you brought it to them. Remember, if a real estate agent brings the deal to them, they have to pay for that as well.
One thing to note. As far as we know, there are no restrictions on wholesaling since there are no restrictions on signing a contract to purchase a property, and the same goes for selling the contract. Real estate agents tend to protect their turf and in many states, you need to be careful about receiving fees where you could be seen to be acting as a real estate agent without a license. You should find an attorney in your area and ask them for clarification.
The Right Attorney
Regarding attorneys – You can probably have a first meeting and ask some basic questions without having to pay. After that, they will probably want some compensation but it may not be that much depending on what it is. Finding the right attorney is important. Some states require attorneys to do the transaction and others don’t. But, a lot of real estate attorneys (primarily title attorneys) just do vanilla deals of regular home buyers and regular mortgages. You don’t want them. There are lawyers who do that but also work with a lot of investors. That is who you want. They can give you a lot of great advice, but can also give you some good contacts for other aspects of the investing business.
I think that is enough for now. We will cover some more things you can do without much money such as lease options and other things if you have some money. Till later.
The above is informational only and not legal advice. Each state has different laws and frequently there are differences between counties, cities and towns. You need to check with your lawyer and other appropriate professionals.