It Takes Money to Make Money and Other Big Lies
by Ron LeGrand
Whoever said it takes money to make money was someone trying to justify why
they’re broke. It does not take money to make money, and I’ll prove it. I’ll
give you a step by step plan to buy and sell a house, even if you’re absolutely
broke, have a negative net worth, no job, no friends, no credit and just got
pardoned from the state prison. The truth is, if you can’t make money without
money, you can’t make money with money!
When I started in 1982, I had no money or credit. I was broke. I had no credit
cards, no rich relatives, not even a wife working to support me. I was lying in
the gutter looking up at the curb. I’d quit my job and burned the ships behind
me. The only way out was to make it, or get another job. I had a mortgage and
bills just like everyone else, yet somehow I made it happen. I succeeded in
spite of the odds stacked against me.
You wanna know why? I’ll tell ya why! I succeeded because I had no money or
credit! Believe it or not, having money and credit when you begin your career as
a real estate entrepreneur can do you more harm than good. It can ruin you if
you’re not careful. Having no money keeps you focused on doing the deals that
don’t require money. If your credit sucks, like mine did, you can’t apply for
bank loans. Therefore, you have inadvertently avoided the two biggest mine
fields. Not because you were so smart, but because you had no choice.
Whether you have money or not, you should learn to leverage your brain, not your
wallet. When you do that, having money becomes a non-issue because you don’t
need it to buy houses. If you write big checks, you’re always worried about
losing those checks. If you guarantee loans, you risk everything you own. Do
neither, and you eliminate your risk. I bet I’ve said those words a thousand
times, and I still see people who should know better doing it anyway.
Don’t get me wrong, I’m not saying you shouldn’t have money. I’d actually prefer
you to be filthy, stinking rich! I’m just saying you’ll get there a lot quicker
if buying houses doesn’t depend on your capital or the number of loans you can
borrow. Because if it does, you’re a slave to your limited resources and your
business will move at a snail’s pace.
How many loans can you get before you get cut off? Only a handful! Then what?
How many deals can you buy if you have to write a check for each? You get the
drift. On the other hand, how many loans can you take subject to before you get
cut off? That’s right, there is no limit! And no one’s counting, because it’s
endless. You can buy 500 houses and never ask permission or fill out an
application to submit to a brainless loan officer.
The loans are not on your credit, and you aren’t personally liable. If disaster
strikes before the loans are paid off, like a deep recession, it’s now the banks
problem, and not yours. If you’re new and I lost you there, subject to simply
means the loan stays in the sellers name, but title transfers to you. You can
learn more about this from the For Sale by Owner Cash Flow System and the
Multiple Offer Strategies Boot Camp.
If you’re buying junkers to rehab, how many private loans can you get before you
get cut off? All you want! You should always come away from closing with more
than you need to buy and fix the house. So having enough money to buy a junker
isn’t a problem. The problem is lining up your lender or mortgage broker to get
you the money, which you can do in a coma once you make up your mind to get it
done and quit using money as an excuse to fail.
“But Ron, I can’t find any private lenders or mortgage brokers that will work
with me!”
Whine, whine, whine. Well here’s my response to that: bull! What you really mean
is no one has come to you and begged you to take their money, so it gives you an
excuse to be a lazy loser. Have you ever asked for money? How many times? What
did you say? Who did you ask? Were they broke? Have you looked for brokers? If I
put a pistol in your ear and gave you ten days to find a private lender or get
exterminated, would you find the money?
Okay, forget private money and forget rehabs. How much money do you need to
wholesale a house? You guessed it: nada! Well, maybe a $10 deposit to the
seller. Can you raise that all by yourself? How much do you need to lease option
a house and then sublease it to a tenant/buyer? You know the answer: none!
So let’s recap for a minute. Taking over loans subject to on pretty houses
usually requires no money from you, or, at most, a small amount. Yet you can
immediately lease option the house or sell with owner financing and pick up
$5,000, $10,000, $20,000 or more from a deposit or down payment, all within a
few days.
You can also buy junkers and rehab them using private loans. Getting cash when
you buy and sell, never spending a dime of your own money. You can also lease
option pretty houses from the seller and sublease to tenant/buyer, picking up
deposits in the thousands within days and huge back-end checks when they cash
out.
Wait, I’m not finished! Don’t forget about the bargains! Flip them to bargain
hunters and make $5,000, $10,000 or more and never own the house. All of this
with none of your own money or credit.
So I ask you, what’s all this crap about how you can’t get started or get moving
because you don’t have the money? I think I made it very clear, money is not
your problem.
Since I don’t know you, I don’t know what’s stopping you, but I’ll tell you what
stops a lot of folks...grit, or the lack of it! No guts. Afraid of their own
shadow. Going through life avoiding confrontation or pain. Can’t grow because
they won’t go. You wanna know who seems to do the best in this business? The
people without money or credit, but lots of grit. And how do you get grit? It’s
simple. You first suffer adversity and get beat up and kicked around awhile.
Then one day you wake up and realize they canÕt hurt you anymore and there’s
only one way to go...up.
When you quit worrying about losing, you can start thinking about winning. You
see, people with grit have learned to quit playing not to lose and begin playing
to win. Does this mean you don’t have grit if you haven’t been to the bottom? Of
course not. Adversity is not a requirement for grit. It just seems those who are
the bloodiest seem to be more fired up and move quicker, with more passion.
They’ve seen the black hole and they don’t want to go back.
It’s quite common for those who begin with money to leap before they look and
spend money on stuff that doesn’t produce revenue. Stuff like office furniture,
computers, electronics and foolish advertising that wastes money. A smart
entrepreneur will put their money in the bank and start their business on a
shoestring. All the fancy stuff doesn’t put a dime in the bank. In order to do
that, you must make offers, and you should be making them without using your
money or your credit.
Here’s a simple plan to do your first junker deal from your home using no start
up capital (eliminating the risk). When you get that first check you can use
some of it to get the things you’d like to buy to help you grow the business.
This plan applies to you whether you’re dead broke and bankrupt or loaded with
dough and can’t wait to spend it.
1. Ride around and find 20 ugly, vacant houses. Copy down each address and get a
photo. You’ll find them in the lower priced areas. Here’s a tip: you won’t find
junkers in gated communities!
2. Call the houses with FSBO signs and see if you can buy them at a wholesale
price of 50 to 60% of the after repaired value or less. Be sure to let the
seller name the price first. “He who speaks first have big foot in mouth.” Call
the Realtors on listed properties and get the facts. Make an offer if it makes
sense. These will not be your best deals in today’s market and they’ll require
bigger deposits, but can still be worthwhile. Track down the owners of the
houses with no sign and call or visit them to make a deal. These will be the
best deals, but require more work.
3. Persist with step two until you get a signed contract on an ugly house that
excites you. This step is crucial and you must keep charging until it’s done. If
you’re broke, it should take about a week. If you’re loaded, it could take a
year.
4. Have the title checked by ordering a title search from a title company. When
you learn it’s clear, move to step five. If it’s not clear, go back to step one
or two.
5. If it’s clear, run an ad for three days in your paper that says “Handyman
Special, Cash, Cheap, 555-5555.” Put it in the investment property section.
6. Take the calls, tell them you’re asking price (which should be at least
$5,000 more than you’re paying) and send them to the property. Build a buyers
list in the process.
7. Meet the first person who wants the house at your price and get a $500
deposit and a signed agreement assuring they’re ready to close within two weeks.
8. Set up a closing date with the title company and let them do a simultaneous
closing. Pick up a check and celebrate. You also may simply assign your contract
and get paid directly from your buyer.
9. Do it again.
That’s it! Your first wholesale deal. Do you have questions? Of course. So what!
Just go do it and use your best judgment. Will it go much smoother if you get
trained first and are schooled on each step? Yes, it will. No question. But hey,
you said you were broke and couldn’t afford training. So just go make a mess and
blunder your way through until you get a check. Then get the training as soon as
you get paid.
By the way, I’ve had people do deals from just reading my book, others from
attending my one day workshop, and still others from listening to just one tape
they borrowed from someone. These are my kind of people. People who just do it
and don’t listen to dream stealers and broke morons. People who don’t let any
S.O.B. tell them they can’t because they don’t have any money or credit. People
with grit.
Bio:
Ron LeGrand is a nationally recognized real estate expert and trainer with 25
years experience in both residential and commercial properties and a 20 year
history of hard money lending and brokering. His experiences include personally
buying and selling over 1,600 single family houses and completing over
$300,000,000 in Commercial Property deals with student partners all over
America.
He’s obtained current real estate developments across America with market values
exceeding two billion dollars, all under his control. His properties include
office buildings, industrial, commercial, mixed use and residential land
development, luxury condominiums, marinas, etc.
Mr. LeGrand is a highly sought after platform speaker whose addressed audiences
as large as 20,000 and as small as 100 in hotels and convention centers across
North America, sharing the stage with leaders such as Donald Trump, Robert
Kiyosaki, Rudy Giuliani, Tony Robbins, Larry King, Dr. Phil, Suze Orman, and
many others. For the last 20 years he’s been helping thousands of ordinary
people take their lives back and create financial freedom by implementing his
systems for success as real estate investors. Today he’s considered the
country’s leading expert and is referred to by many as the “millionaire maker.”
His book is in stores and online and over the years he’s created dozens of home
study products, held live training events on various real estate related
subjects. He spends much of his time passing on his experience at those live
training events, held in various parts of the country, while simultaneously
running over ten different business he owns and controls.
Ron LeGrand's 41 year marriage to his wife Beverly has produced four children,
nine grand children, and two great grand children.