digest
Short Summary
Main recommendation: Start investing in real estate with little or none of your own money by using one of four strategies: partnering up, seller financing, investing in cash-flowing REITs, or finding undervalued deals. The speaker, Henry Washington, says the choice depends on your available time, your network, and your willingness to be consistent in building relationships and finding deals.
Key Points
- 1. Partner up: Find someone who brings the money while you do the work, such as renovating or finding deals, especially for investors who don't live in the market.
- 2. Seller financing (owner financing): Buy a property by having the seller act as the bank, making monthly payments to the seller instead of getting a bank loan, which can allow no money down and sometimes no interest.
- 3. Cash-flowing REITs: Invest in real estate investment trusts, which must distribute 90% of taxable income as dividends, creating a passive way to earn cash flow.
- 4. Find undervalued deals: Learn what a good deal looks like in your specific market, then focus on one deal-finding strategy and repeat it consistently until you have a deal, which can then be funded through your network.
Details Worth Noting
- Concrete instructions:
- Partnering: Attend real estate meetups and engage in Facebook groups every day, not just join them. Make clear to potential partners what you will do to hold up your end of the bargain to build trust.
- Seller financing: Pull a list of sellers who own at least 40% equity in their property, with the property owned in the seller's personal name or in a trust (not an LLC), filtered for small multi-family properties, owned for at least 10 years.
- Seller financing outreach: Send handwritten-font mail saying you are a real estate investor who would like to learn from them about building their portfolio, and that you would make an offer if they're interested in selling.
- REITs: Buy REIT stock to earn both stock price gains and dividend payments.
- Finding deals: Learn what a good deal looks like in your market by networking with investors and asking questions. Choose one strategy (off-market or on-market deals, cold calling, direct mail, agent outreach, or offering below asking on MLS listings that have been there 90+ days, offering about half the asking price (one example strategy mentioned, not a universal rule)) and stick with it consistently.
- Funding a deal you find: Buy it yourself, partner with someone in your network, or borrow from someone in your network.
- The speaker says partnering takes relentless consistency; he met his first partner at a real estate meetup and they later owned about 25 doors together.
- For seller financing, the speaker notes the pitch to retiring or tired landlords is passive income with no tenant or toilet problems, since the buyer takes over ownership and management.
- He argues people focus too much on how to get money before they have a deal, when finding the deal matters first.
Bottom Line
Your money constraint matters less than your ability to build relationships and consistently pursue one clear path, whether that's a partner, a seller willing to finance, a passive REIT position, or a deal you can find and fund through your network.
