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Read the Transcript:
"Where do I find startup investment capital?" -- Shabere Dalala, Jackson Heights, New York.
Joe: That's a question that every investor asks at some point in their process, especially investors who don't understand how to do deals without capital.
Joe: They always say, 'You need money to make money' but my philosophy is, 'If you can't do deals with no money, you sure aren't going to make money with money." You need to learn how to make money with no money, and by that, I mean no credit, no cash and not using other people's investment funds.
Joe: You're going to use seller financing instead, so essentially you are using other people's money, but you're not using a bank's money or investor money.
Joe: There are new issues with the Dodd-Frank Act and some other things like that, i.e. the S.A.F.E. Act, that make it a little more difficult to do private money these days. It's still possible and still can be profitable but I would suggest that as you're getting started, that you learn how to do it with no money.
Joe: You're going to be making mistakes as you go through this process. Even if you have me as a mentor, you're still going to make mistakes. That's one of the ways that I teach this -- I teach you to take action on certain things, so I know that you're going to make mistakes on those things. I'm not TRYING to make you make mistakes, but you're going to if you follow through with this process the way I teach it.
Joe: Those mistakes will teach you much more than anything else can possibly do. But if you do deals where a mistake means that you have to file bankruptcy or it damages your credit or it means you lose a wad of cash, that's not an acceptable way to do business, so instead, learn how to do this process with no money and get it going that way.
Joe: If you want to find investment capital, as far as private money and hard money loans, hard money loans don't make much sense -- there are very few situations where it'll pencil out. I can show you that -- I have people that argue with me on this all the time, but if you sit down and look at the numbers on this, most of the time, hard money doesn't make sense, plus you need dramatic under market values to make it make sense.
Joe: If you're looking for dramatically under market value properties that you're going to wholesale, which means flip them without buying them and without paying for them and make a chunk of money (and that's a viable to way to do it as well and I teach you how to do that) you have to buy that property dramatically under market value in order to find a cash buyer for it, and those types of sellers are going to be a lot fewer and farther between.
Joe: We'll come across twenty viable seller financed deals before we come across one dramatically under market value property, so if you're doing wholesale deals, we're doing twenty times as many deals as you simply because we can do deals that you can't do because you need it to be dramatically under market value.
Joe: You're looking for desperate motivated sellers. We're looking for people that just want to sell their property. Yes, they're motivated -- they want to sell their properties, I consider them to be motivated sellers -- but they're not desperate, or, they're in a situation where they can't drop their price on the property -- they can't leave a ton of money on the table.
Joe: So if you learn how to do this properly, you'll go after the right type of lead, there will be plenty of them and you won't have to leave a lot of deals on the table like every wholesaler or rehabber or short sale dealer that I deal with or have known has had to do. I hope that helps. Thanks.
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