If you want to make a million dollars in real estate, all you have to do is flip 50 houses that net you $20,000 each. Doing those 50 deals is a numbers game. You will need to look at a lot of houses before you close a single transaction.
For every 100 houses in foreclosure that you research, only 10 will be worth investing in. Of those 10 that are worth investing in, you will only really end up making offers to buy 3 of them. Of those 3 that you make offers on, you might only end up buying ONE of them. You will be faced with 99 no’s before you get to 1 yes. Never get emotionally attached to any one deal. That’s the “tough love” aspect of the foreclosure investing business.
That means that in order to do 50 deals at $20,000 net profit a piece, you would have to look at 50 x 100 = 5,000 houses.
Wow. When you put it into perspective like that, it doesn’t seem so difficult does it? All you have to do is research 5,000 houses, find the 500 best ones out of those, make offers on 150 of them, and end up closing on 50 of them. Where will you get the money to buy 50 houses, since you can barely afford the mortgage on your own domicile? Simple: You will use other people’s money. Here are some sources:
- Hard money lenders: Do a Google search on this term and you will find tons of them. These are private investors who are willing to lend you money for real estate projects at a much higher interest rate, based solely on the equity of the house and not on your own credit.
- Private investor: Again, do a Google search on “private investor” or “money partner”. Or join a real estate investment club in your local area. Somebody there will have connections to a private investor who would be willing to lend you money in exchange for a percentage of the profits.
So that’s all there is to it. It sounds simple when you break it down to mere numbers like this, but obviously the biggest obstacle to your success is your own mental attitude. If you truly believe that you can do it, and you are determined to accomplish it, and you are not afraid of rejection or failure, realizing that every “no” is one step closer to “yes”, then you will be successful.
