Millionaire Real Estate Investing with Jim Pellerin

Episode #97 - 4 Real Estate Investment Strategies That Don’t Require Borrowing

September 4, 2020

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When looking to get into real estate investing, you want to look at four deals that did not require you to put up any of your own money or four different strategies that do not require you to put up any of your own money. ๐Ÿ‘€๐Ÿ˜๏ธ๐Ÿ’ฒ๐Ÿ“‘

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The first one is what I call wholesaling or what everybody calls wholesaling.ย 

That is where you are going out and you are finding properties for other people, for people that are doing fix and flip

This is a really good way to get started with real estate investing.

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This is where you end up doing a lot of research for other people. These other people will take your properties, pay you for finding these properties, and do whatever they want with them. Most of the time it's fixing and flipping them.๐Ÿ”Ž๐Ÿ‘ฉโ€๐Ÿ’ผ๐Ÿ‘จโ€๐Ÿ’ผ๐Ÿ˜๏ธ

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Sometimes it's fixing and holding them. So that's called wholesaling.ย 

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The reason it's called wholesaling is that you are buying properties that are really reduced in price at what it's normally referred to as a wholesale price. And then you are flipping them to a cash buyer. You can usually get about $5,000 to $10,000 for a wholesale deal.โฌ‡๏ธ๐Ÿ’ฒ๐Ÿ˜๏ธ๐Ÿค

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ย Another easy way is what's just doing whatโ€™s called bird-dogging or referrals.

The difference between bird-dogging and wholesaling is that on wholesale you actually put the property under contract.

With wholesaling, you have a contract to purchase a property, and you assign that contract to the owner.ย 

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With bird-dogging, all they are doing is they are providing an address or a person that's looking to sell a property to a cash buyer, which is somebody who is looking at doing a wholesale or somebody that is just looking for good properties in general. ๐Ÿค๐Ÿถ๐Ÿ‘จโ€๐Ÿ’ผ๐Ÿ’ฒ๐Ÿ˜๏ธ

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That is what's called bird-dogging. You are just going out and you are looking for properties. You are not doing a lot of work to put them under contract.๐Ÿค๐Ÿถ๐Ÿ‘€๐Ÿ˜๏ธ

A bird-dogger does not make as much money as a wholesaler.ย 

They can make about $500, $1,000, or maybe $2,000 for referring properties to these cash buyers, to these fix and flippers. A referral or a bird dogger could actually refer properties to a wholesaler. ๐Ÿ’ฒ๐Ÿ˜๏ธ

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So you can build a network of people.ย 

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So that was two ways. One is bird-dogging. One is wholesaling.

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Another way you can buy properties without any of your own money is by doing seller financing and seller financing/rent to own. ๐Ÿ˜๏ธ๐Ÿ’ฒ

Seller financing is, where you get the vendor to hold back a mortgage, either a first mortgage or a second mortgage, or you get the seller to assign you the property, subject to them staying on the mortgage. ๐Ÿ‘จโ€๐Ÿ’ผ๐Ÿ˜๏ธ๐Ÿ‘ฉโ€๐Ÿ’ผ

That is called subject two. Seller financing is the third way. The fourth way is lease optionsย 

The lease option is where you are actually leasing the property from the seller with an expectation that you are going to buy it sometime in the future. You have an option to purchase that property.๐Ÿ˜๏ธ๐Ÿ’ฒโณ

What you would do is you would get the seller to stay on the property, stay on the title for two to three years, depending on the term of your lease option.

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What you can do is then you can lease the option that property to a tenant-buyer. So you would become a middleman in this purchase, in this situation and that is what is called a sandwich lease cause you're sandwiching yourself between the seller and between the tenant-buyer.๐Ÿ‘ฉโ€๐Ÿ’ผ๐Ÿ˜๏ธ๐Ÿ’ฒ๐Ÿฅชย 

In conclusion, those are the four ways in which you can acquire properties without using any of your money. They are bird-dogging, wholesaling, seller financing, and lease options. 4๏ธโƒฃ๐Ÿ›ฃ๏ธ๐Ÿ˜๏ธ๐Ÿ’ฒ

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