Foreclosure Deals Coach Podcast

Real Estate Investing: How Much Money Do You Really Need?

April 20, 2023 Donny Coram
Foreclosure Deals Coach Podcast
Real Estate Investing: How Much Money Do You Really Need?
Show Notes Transcript

In this video, Donny Coram shares his tactics for raising money to invest in real estate. He emphasizes the importance of taking action and getting your money together, whether that means reaching out to family and friends or leveraging equity. Donny also highlights the current market shift and the need for investors to be prepared for the next market by developing their skills and taking calculated risks. He stresses that the skills he teaches in this video will be extremely valuable in the next two years, as the real estate market becomes increasingly complicated. Don't miss out on this valuable advice for raising the capital you need to start investing in real estate. Check out the article in the description for more tips on good returns on investment.

Article: HERE

🚀 Master Foreclosure Investment with Donny
Learn the secrets with the "5 F’s of Foreclosure Investment System". Dive deep into properties, transform them into profits, and shape your financial future, all for just $49.
👉 Enroll Now

💡 Unlock Your Foreclosure Potential with Donny
Ready to secure a minimum profit of $25,000 on your first deal? Donny's "Do it with you" coaching model guides you step-by-step. Turn potential into profit.
👉 Schedule Your Call Now

🔥 Join the Foreclosure Experts
Step into our dedicated community. Gain expert insights, strategies, and connect with like-minded investors.
👉 Facebook Group

🌐 The Ultimate Foreclosure Hub
Equip yourself with the best-in-class resources, strategies, and updates from the foreclosure world. Your investment journey, elevated.
👉 Official Website

🤝 Network with Donny Coram, The Foreclosure Deals Coach
Forge connections, share your journey, or simply drop a hello!
👉 LinkedIn
👉 Instagram

Note: Some links may be affiliate. Your support keeps us creating quality content.

Welcome to the Foreclosure Deals Coach Podcast. The real estate market is shifting. The time is now. The Foreclosure Deals Coach Podcast is your home for the mindset, tactics and tools needed to break through your limiting beliefs and find freedom by investing in foreclosure deals. Don't buy a house, buy a deal. You need to get into this right now. And now your host, the Foreclosure Deals coach, Donny Coram. Hello, hello. Hello, ed. Welcome back to the Foreclosure Deals Coach Podcast. I am your host and foreclosure deals coach Donny Coram, and my mission every week is to educate you about building income. And wealth with foreclosure investing. Please don't forget to subscribe to the channel Follow like wherever you download your content. On today's show, we're gonna talk about how much capital you are going to need to start investing in real estate. And I'll give you a hint before we get too deep. It is much less than you're thinking. Okay? I talked to coaching students, perspective coaching students. Every day and all of'em are like, well, don't I need this amount of money? You do not. We're gonna talk about how much leverage capital you need individually to get a deal done, and in a lot of cases, you don't need any of your own money at all. It comes down to how good of a deal you can track down. Before we get into that, as always, we wanna hop into our motivational. Speech for the, the days. Let's look at that here a little bit. This one comes from my boy Grant Cardone, and here's his, uh, here's the quote, if you will. We'll make that a little bit bigger so you all can see that. Here we go. All right. Investing puts money to work. The only reason to save money is to invest it. Okay. Now I want you to sit on that for just a little bit. Okay. I talked to clients, they're like, well, I got all this money in savings. I wanna invest, but I don't wanna deplete my savings. What were you saving it for? If you given any thought to what the purpose of saving the money was, if you're not gonna invest it in making you more money, like you need to put your money to work. If you've got it sitting in a bank account right now, the bank is putting that money to work and they're, they're investing it. In car loans, mortgages, et cetera, while they're paying you 0.02% or whatever to let it sit in a savings account. They've got that money lent out to people in your local community at six, seven, 8%. They're making money on your money. But as always, don't take my word for it. Let's get some information from Grant to talk a little bit about why real estate is a perfect place to invest. Check this out. Now. I read these books when in my twenties about successful people. They all, they all owned real estate. All the successful people, the, the Rockefellers, the oil barons, the railroad guys, they all ended up with real estate car dealer. Car dealers don't make money selling cars. Just so you know, car dealers make money because they pay for their real estate, they rent it back to the store, and they end up with a facility that pays them forever for, for acres and acres of real estate. Just so you know, every car dealer in America gets rich because of their real estate, not just because of their cars. The. Pay for the real estate. How many of you know a rich car dealer? Okay. McDonald's Ray Crock. He, he, he didn't, he didn't have the recipe. He got control of McDonald's because of real estate. Jeff Bezos today in every major city in America right now is making real estate place. Mm-hmm. Think about this, okay? Think about how all the really wealthy people are investing in real estate. Now, there's obviously two strategies for investing in real estate. There's the long haul strategy, buying rental properties, getting the rental income, gaining from the appreciation. And you want to do that. You want to have your passive income portfolio built. But where a lot of people go wrong as they wanna start by building the passive income portfolio, they wanna retire before they get. Okay. And so you're gonna, the reason that won't work is cuz you do need some capital to invest in long-term real estate. See, when you're buying short-term real estate, they'll do zero down deals and et cetera. But when you're starting to get into a property you wanna hold onto on a 30 year mortgage, you generally gotta go after that. A pretty hefty down payment. If we're talking about the conventional world, we're talking about 20% down. So if you're buying a retail property, which in my market is gonna be in the$400,000 range, you gotta show up with$80,000 to put down on that property unless you set us some creative financing to get around that. Okay? Where are you going to get the money to make that, that investment? Well, my strategy guys is that you flip properties to produce the income, the the capital that you need. To invest in long-term properties. Okay, so if you've got money coming in from a flip and you're doing two, three or four of'em a year. In my best year I did 47 of them providing us with a ton of investment capital to buy long-term rental properties. You are getting started out, so you're gonna need to do flips to produce an income that can give you the capital that you need to get a deal. Okay, and, and a long term deal. You don't wanna flip long term to make money. I did flipping for a long time, and I'm telling you it's a great way to produce an income, but it will eventually burn you out. You are day trading property, okay? And day trading means you gotta find it, you gotta analyze it, you gotta fund it. Then the construction part starts up and that's where things get really. Interesting. Right? And then you gotta sell it. It's a full-time job, okay? If you're doing a bunch of them. But if you're only doing a handful or so, you can maintain your full-time job, take that income control, you know, regulate your life, pay your bills, and et cetera. And then you've got this. Quote, unquote, side hustle when you're getting started, that's gonna produce the income that you need to eventually build a passive income portfolio to live on for the rest of your existence. The idea is creating passive income and getting a solid return on investment. Which brings us to a question. What is a good return on investment for your money right now? Okay. With the stock market, taking a bath the way it is, where should you be putting money in? What kind of rate of return can you expect and be happy with if you're getting it? All right. Well, to get that answer, we're gonna reach out to the Motley Fool. Okay. This is our article for today and the Motley Fools an investment magazine, a digital magazine. I have subscribed to these guys for. Okay. And what they're talking about in this quote, this, uh, what I looked up was, what is a good return on investment right now? So it says right at the top, you have one goal when you're investing, and that's to make money. And every investor wants to make as much money as possible. But how do you know what a good rate of return is? Well, if you scroll down through, this is a great article and I highly recommend you read it, but it talks about at the bottom here. 3% on treasury bills, waste of time, barely keeping pace with inflation, which is running outta whack right now. Government bond, we're basically lending the money to the government and they're investing in whatever the government spends money on and paying you a 5% return. Then you get to the large cap and then small cap stocks. But in the bottom line here, the expectations for return in the stock market is 10% or. Right. Can you consistently make 10% in the stock market? I don't know about right now. I can tell you the market is so volatile that it may be very difficult to do that if you've got an inside track on stocks that are consistently gonna make that return. Talk to me. Okay? But in real estate, we don't, we can't use a term guarantee for any investment. But what I can tell you is your cash on cash return when you're investing your capital into real estate is gonna far surpass. 10% a year, and this is how we get there. Let me close this article. So when you're trying to invest in real estate, people often ask me, how much money of my own money do I need to get started here? Well, my requirement for coaching students is that you come in with a minimum of$25,000 liquid with the preference that you're gonna get to$50,000 to have that there. Now, you don't necessarily need to spend all that on a deal. It is very market dependent. The reason I wanna have between 25 and 50, and we're gonna determine exactly what you need liquid when we do our coaching call together. Is because you're gonna need to put a 10% down payment around that amount when you're doing the coaching. Now, if you go out there and you try to do a deal on your own, okay, you're just starting out and you wanna do a deal, which by the way blows me away. If you wanted to become a a pilot, like you wanna fly aircraft, are you gonna hop in a plane? And go, yep. I'm just gonna figure this bad boy out. We're gonna do some flying today. Right? If that's your plan, I ain't getting in that plane. I'm gonna level with you. Okay? That's not gonna work for me yet. People want to get into real estate investing. They wanna start out into one of the more difficult parts of real estate investing, cuz honestly by and hold, if you got 10 years, you're gonna be fine. Okay? Flipping requires a little bit more expertise is a lot more moving parts. Okay, so if you're going to do that kind of investing, you really, really, really, really want to coach on your side to help you out with that. I am just a hundred percent certain because I got coaching myself almost 20 years ago, and that's a large part about why I sit before you today. Coaching on doing real estate investing. So I would just highly advise, and I mean highly advise that you don't attempt to take on real estate investing without professional help. The reality is the lenders will let you do it, but I promise you, as they're taking that 20% down payment, giving you the highest interest rate possible and charging stupid amounts of points, they're laughing at you a little bit. Okay. Because they're gonna make sure that they protected their interest in every capacity. When you sign up for coaching, you are taking half, if not more than half the risk off of that transaction, because I'm gonna walk you through every step that you need to find that deal. Figure it out, okay? Fund it using my partners, getting a lower interest rate, lower down payment, and lower points on the. Fix the property to market. This is where most people go wrong. They wanna, they either under improve it like, well this looks good enough, let's get it sold. Or they severely over improve it cause they've been watching too much Chip and Joanna games that day and they wanna put in some gold plated faucets and et cetera, and then flip that property for a profit, reducing their transaction costs through my program. The combination of those five steps. Virtually guarantees you're gonna be profitable on this deal, and my coaching offer to you is that you're gonna make a minimum of$25,000, but I'm hoping for a lot more on your first flip, and we're gonna work together until you get that first flip done. Okay. I don't care how long it takes, and if the first flip comes in at less than 25 grand, it's rare because we buy them, right? So it doesn't happen often, but if that does happen, I'm gonna sit with you until we get the second flip done in a 25,000 profit. I'm in no rush. I want results for my clientele, okay? The liquidity that you need to bring to the table is somewhere between 25 and$50,000. Now, it's important to note that that liquidity doesn't have to be your. I prefer it wasn't your money of the 47 flips I did in 2021. Not one of those deals was funded with my own capital. I used private money investors to fund the back end of the deal and then use hard money investors to fund up the first position loan on the deal. So I was able to get the deals done without using my capital. I can promise you, in your sphere right now, you've got people with money who are making poultry returns in their ira or they're in the stock market. They're getting cremated right now, who, if you present them with a solid lower risk opportunity to make a much higher return on investment way past that 10%, I promise you they'll have that conversation. But the reason they might not do it is because you just got. There's a lot of risk associated with lending money to somebody who's never flipped the house. Now, I know you mean, well, I know your intentions are good. I know you're gonna try your butt off to be profitable, but because you don't know much about doing this, and I don't mean this to be mean, but just put yourself in the perspective of your private money lender. Do they wanna lend money? Somebody who's never done this before? Let's flip the script a little bit. What if you brought in a professional business coach? To help you to do this deal, so you weren't worried about. Anything going wrong? Do you think those same private lenders would wanna work with you in a better capacity? The answer is absolutely yes. The key here is that you guys have to get that coaching dialed in and work on that first, get the education. Much like the pilot's license, et cetera. Start with the education and then work your way up to the capital. Okay, so when we are doing coaching, we're gonna be working on teaching you how to find deals in your local marketplace. So a, you know what a deal looks like. Right, and B, you can present those deals to your private investors. So you're not coming across like you don't know what the heck's going on. When you approach it from that angle, the upside to that is going to be you got a higher probability of finding outside capital to do your deal. So you have heard about the no money down real estate. It is in fact doable. Okay. The reason it doesn't happen very often is because the no money down Real estate is usually coupled by people who have never done a deal, period. right? And it's very difficult to structure a deal with no money down if you've never done a deal, period. So you're gonna wanna change that momentum and get some education. You're making an investment. This is what this show is about, how much you need to invest, but your first investment's going to be in yourself, getting the education that you need to start fixing and flipping properties right there in your local market. And I wanna be your teacher, your coach. I wanna note that I'm not a. Okay. A mentor is somebody who just wants to tell you what they did. I had a great mentor and coach. He was both, he taught me everything I needed to know about what he was doing, but then he held me accountable to doing it. Okay, so I'm gonna teach you a little bit with my five F's, a foreclosure in investment system course. You're gonna get the lessons from the course as part of the coaching program, and then you're gonna get the coaching to keep you accountable to making sure that you actually follow the skills that I'm teaching you in real time. Okay? So, as always, we wanna hop in and I wanna show you a deal that we found for kicks here. I, uh, I jumped into Austin, Texas. And mostly because Austin's a huge music town and, um, I'm a musician. I, I love doing music myself, so I thought, man, let's check out what's going on in the Austin market. Okay, so here we are flipping through what's available in the Austin market. We put in some filters. I did this before you guys were on screen here. But, well, you saw a part of it when you selected fix and flip, 75% or less. And I like to see the cheaper homes. Austin's kind of expensive now, so I went$400,000 or less, right? Which is not considered a cheap home in a lot of markets, but that's cheap for Austin. Okay, so here's what came back. The first thing that popped up was this property on main drive. So we got a property on Maine in Texas, which is a little confusing, but what abs right? So we have this property on Maine Drive. I'm having trouble finding. Here we go. All right, and it's$325,000, right? It's a three bedroom, two bath with a one car garage. You can see there. We wanna flip through the photos here as we always do. And this looks perfect. Look at the, the dated nature of the carpet. It's dirty. That tile is terrible. He couldn't even find his way outta the picture. You see him up in the top there, right? This house needs. Excellent. But is it a deal? Let's determine that real quick. Okay. To determine that Privy is doing all the heavy lifting for us. It brings up the comps in the neighborhood. We wanna sort by most recent comps because we're trying to find what's going on in the market. And this one's a half a mile, not even a little over half a mile away. Built a little bit older. Right. Three one, and it went for 5 75. This is striking me as a deal. Guys, we should be looking into this. Here's another one nearby went for 4 89. Okay? Hard to tell from the pictures what this property needs repair was, but I can't imagine what we're gonna spend more than 40 or 50 grand, and that's probably being a little bit gracious. This is not in terrible shape. It needs paint, it needs flooring, et cetera. This strikes me as a deal. So if we're into this for 365, 3 75 and the house is selling, as you can see here, we got a lot of comps in the late fours that took place in February. So we want super recent comps. This one in Colonial. Check out the stop sign. Half a mile away went for 5 24. It's a 3 22, so it's got a two car garage. We can change the value on that a little bit, but it went for 5 24. It's 1500 square feet, so it's very similar in square footage. They did a wonderful job of the remodel. Right, and it's sold for 524,000 against the purchase price of 325,000. This property on Maine is a deal, so I don't wanna hear from you that you can't find deals in my local market. We can find deals anywhere using the privy application. You just gotta be motivated to. Get going and put the fears aside and start investing in yourself to get the education and the real estate market that's happening around you. I am certain we can be at a 10% annualized return. How do I know that? Well, if you're gonna put 25 to$30,000 down, okay, and you're gonna make a$25,000 return, and we're definitely gonna get that done in less than a year, that's a hundred percent annualized return if you do one. Now, the reason it's such a high rate of return is the stock market's kind of passive, right? You put the money in, you let the stock go up in value, and you sell it a profit. That's how it's supposed to work. It's not been working that way lately, but that's how it's supposed to work, right? Well, with's real estate, it's. The flipping, especially, it's super active, okay? You are finding the property, you're fixing the property, and you're earning your rate of return by adding activity. Now, the good news is, is you're hiring out the contractors. You're, you're getting a lot of the work done by other people, so it's not like day-to-day activity. You can still maintain your day job, but because there's activity involved, it pays a much higher rate of return than you can get in the stock. So if you've got money sitting in savings, 25, 30, 50 grand, and you wanna get into real estate investing, you just don't know where to get started, you've got to join up on this coaching thing, man. or Woo man, join me. Click on the link. Head out to foreclosure deals Get a coaching assessment call scheduled. Let's talk about your liquidity. Let's talk about your market, but let's talk about finding deals right there in your local marketplace, cuz there are deals everywhere. We just found one in Austin, Texas. Just like that. Okay. The time is now. The market is shifting. There are opportunities anywhere. Now I need to be, I need to be clear. The skills I'm teaching right now are valuable today, but as the market shifts over the next two years, they're gonna get increasingly more valuable as more foreclosure are hitting the market. So you wanna learn this skillset right now. You wanna figure out, start reaching out to family and friends and people who want to. With you, okay? You're not turning into a a Ponzi scheme where you're pulling money outta your sphere, but rather saying, I'm about to get heavily educated and flipping houses. Would you be interested in investing in that? Right? Take just a little bit of risk with that savings you've got sitting there and this market, you're gonna be able to dominate. If you can make money in this market where we're still kind of heated, the next market, you're gonna be able to dominate and make a huge return on investment. Okay, the time is now. The market is poised for it. Let's reach out, schedule a call and get going on that. Okay? Links to everything we discussed today, and gonna be in the show notes below here. So just check out the description below. Read the article from the Motley Fool and please get involved in this conversation. Join the Facebook group. Fd coach and of course, tune in each and every single week to the Foreclosure Deals Podcast, where we're gonna deep dive into more insights of the foreclosure investment world. Once again, this is Donny Coram, your foreclosure deals coach, thanking you so much for tuning in each and every single week, and reminding you now and always. Don't buy a house, buy a deal. Thank you for tuning in to the Foreclosure Deals Coach Podcast. If you like what you heard here today, remember, new episodes are uploaded weekly. Subscribe wherever you listen to your podcast. Do you want more of the foreclosure deals? Coach, are you ready to learn the mindset, tactics, and tools required to. Successful real estate investor. If so, click the link below to schedule a one-on-one coaching. Call today with Donny Coram, the Foreclosure Deals Coach to determine if coaching is right for you. And remember, don't buy a house, buy a deal.