Getting Started in Real Estate With No Money

Mike DeHaan: [0:00] What is going on, guys? Welcome to today's recording. This is gonna be on YouTube as well as on my podcast, Collecting Keys. So wherever you're listening to this, watching this, if you want more of me and kinda what I do, then obviously, go and check out my other channels. I have the collecting keys podcast. I also have this YouTube channel, which make sure you subscribe. Really appreciate it. It helps me get some more real estate content out there. For this video today, I am going to be diving into how to get started finding real estate deals when you have no money at all. And I'm going to kind of walk through the phases of when you have, like, zero money to when you have a little bit of money to when you actually have money to start investing. As a quick note, if you are somebody that right now has like 20 to $30,000 kind of like saved up that you are planning to put into your business, you will go a lot faster if you kind of just jump to the third item that I'm going to talk to you this video, and you don't start with like the early stuff. Mean, I if you can, you wanna be frugal, can start with early stuff. That's fine. But if you're serious, you can kinda jump to the end, which is gonna be the paid marketing. We're gonna go into how to find deals by investing your money, and you'll be able to move a lot quicker than kinda going through the hustle pieces that we're gonna talk about at beginning.

Mike DeHaan: [1:14] If you are new here and you don't know who I am, my name is Mike DeHaan. And in 2018, I left my corporate career as an engineer. I hated it. I did not want to be an engineer. I did it for five years. And I was working at Boeing. And I decided that I just needed some kind of change. So I left, decided I was gonna do anything else. I spent a couple years working at a gym, driving for Uber, doing odd jobs on Facebook, and got into real estate because it was in every single, like, wealth building kind of book that I could come across and podcast and everything else. Started flipping houses with some partnerships, got into direct to seller real estate slash wholesaling slash flipping slash buying rentals, and built that out into a business that now does a few million dollars a year and allows me to kind of live my life I want. I have 30 people that work for me over there. And I make content because along with the real estate business running, honestly, without me being super involved, I just love helping other people sort of go through the same learning process and realizing that life doesn't have to be as boring as just sitting in an office or waiting for the weekend or waiting to just not have to, you know, waste your life away. Right? And you can't have a lot of control over your finances, building wealth, and learning how to create real money. And I think real estate is a great avenue to do it because it is one of the only businesses that I have seen time and time again allows people to make serious incomes and build a lot of wealth as, like, a small company of, like, one or two people.

Mike DeHaan: [2:38] You don't need to have any special expertise. You just need a lot of work and persistence to kinda understand how things work. And so when it comes to real estate, to be honest, you do kinda need money to make the big money, but I also acknowledge that not everyone starts there. Right? And so if you are serious about wanting to get to real estate and building wealth and you don't have a pain to your name, what exactly should you do? And, yes, as you're starting to, like, think about this, right, one of the most important things to realize is that early on, you're probably not going to do that by actually buying the real estate yourself. Okay, you're going to do that by learning how to identify opportunities, and then working with other people to have them by those opportunities, and you will basically get paid for doing the work. And so this can be done in a couple different ways. This can be done by either wholesaling a deal by getting a signed contract to purchase a distressed property and selling it to an investor for a wholesale fee. Or this can be done by finding a retail opportunity that you then refer to a realtor who will pay you a commission or a marketing fee for finding that deal.

Mike DeHaan: [3:38] It doesn't really matter. And really, if you start to go through the things that I talked about in this video, you'll be able to do both. And if you do a couple of these every single month, you'll start racking up thousands, if not tens of thousands of dollars that you can put into your business and get things moving forward, start and make real money over the next twelve to twenty four months. One last thing before we dive into this, there's an important thing to understand. When you are building any kind of business, there are three main pieces of currency. K? There's gonna be money, which is the obvious one that everyone knows, and then the other piece of currency are time and energy. And if you're coming into this and you don't have any money, then you're gonna need to double down on the time and energy commitment that you're willing to make. Ideally, you would have all three, and that's how you can sort of, like, structure a business and get things moving at a rapid velocity. But when you don't have one of them, you need to double down the others. And so you need to be coming into this. If you don't have any expendable cash to be ready to work hard, spend a lot of time, spend a lot of energy pursuing these opportunities. If you're not down to do that, you probably shut out this video, go watch Netflix, go to something else, because this probably isn't gonna be for you and you're not gonna be successful. You're just gonna be spinning your wheels if you're kind of like doing a half foot in, half it out and just dabbling in this sort of thing. Alright, so we're going to dive into the meat of this thing.

Mike DeHaan: [4:48] So ultimately, our goal with this is going to be to learn to be a deal finder, so that you can either make money off of these by setting others up with the deals that you're going to find, or to be able to ultimately buy them for yourself over the long term that will come a little later when you have money. And there are three different ways that you can fundamentally do this. One is through warm outreach, which is going to be reaching up to inner circle. Two is going to be cold outreach, which can be reaching out to people that have no idea who you are. And then third is going to be massive cold outreach, aka marketing. And that's what you're gonna do when you have a little bit of money to spend and you are ready to take things serious. So going through these. First off, warm outreach. And this is probably the simplest one to start with, because you can be comfortable talking to the people that you're going to be approaching about kind of your intentions. And so when it comes to reaching out to your warm circle, trying to find opportunities, can it be a little bit awkward. You can have people that kind of like make you feel weird about asking or kinda shut you down. But it's probably the most important one to get started with because if you do find an opportunity, it's going to be the warmest conversation you're going to have. And what this can look like can be extremely simple. Okay? You can literally just go to your social media.

Mike DeHaan: [5:59] You can go to your school. You can go to your gym that you go to. You can go to your church. You can go to your d and d group. You can go to your family function. You can go wherever you want, and just start letting every single person know that you are starting a real estate company and you're looking for somebody that might be interested in selling their property. You don't need to say any more than that. Right? As you do that, most people will tell you that they don't know anybody. Most people will say, why are you doing that? It seems silly. You'll get a lot of that. You have some people that maybe even kinda make you feel bad at going, oh, you're a bigwig real estate investor now, are you? F those people. K? You can ignore them because they're not gonna be friends much longer once you start making money. But as you go through, all you need is one or two people that have a friend, a relative, a neighbor, a, you know, acquaintance at work, whatever, that has a property that they're looking to sell, and they're going make that introduction, and that is going to be your first opportunity. Okay. And then once you go and you see that house, you make that connection, you can start to assess who makes sense to wholesale it, aka get a contract at a discounted price, to be able to sell that contract somebody else or to refer it to a realtor. And to sort of like have a conversation with the property owner and see what kind of makes sense for them.

Mike DeHaan: [7:12] The details of that are obviously kind of tricky, you know, selling a home is a big commitment. There's a lot of different pieces that you're gonna have to uncover. But as you sort of look at the home, hear their situation, try to figure out, you know, what kind of makes sense for them. And ultimately, the goal is to come to a win win situation. And then you can work to find the end buyer or the realtor that's gonna work with them, and you can make your money on your end. And so a big thing to keep in mind is that a lot of this is a people business. Real estate is all about learning to solve problems and learning to build these kinds of connections with individuals, whether that's with sellers, whether that is with your buyers, or the realtor connections, or your money connections, or whatever. And once you get good at both of those things, then you can start to bridge them together, and you can make money on the middle on the spread. And that is where I've made a lot of money over the past couple of years. And so if it's a distressed property, what you're gonna do is you're going to get a signed contract with them. If you need an example of a signed contract, you can just comment below, and I'll send you one. And if they are more of a realtor lead, then you can go and connect with realtors that you know, see if any of them will be interested in selling this person's property, make that connection, just let them know, like, hey, you're hoping to get a marketing fee for making that connection or or referral fee. And they the people will know how to compensate you on the middle as you sort of have this conversation. Alright. That's warm outreach.

Mike DeHaan: [8:26] Once you have gone through the entire, I would say, like, your entire ledger of people that you know, then you can start exploring doing some cold outreach. And cold outreach is a little bit different because you're gonna be talking to people who have no idea why you're talking to them or what your intentions are or who you are. Okay. And so there's a few different ways you can do this. The simplest way that will cost a tiny bit of money, not not a lot, a few $100 is going to be to use a list provider, whether that's list source, prop stream, deal machine, there's a whole bunch of ones out there. Those are three that I personally like, You're going to pull a list of all absentee owners, which aka landlords. Okay? You're gonna take that list and you're going to skip trace them to find their phone numbers. There's a lot of different skip tracing platforms out there. Deal machine even has free skip tracing, which can give you all the numbers right there. And you're gonna start calling all of these landlords and just introducing yourself saying that you are a new real estate investor. You're looking to buy some properties in the area, and you're interested there. And you're curious if they would be interested in selling. Most people will say no. On average, for our company, this is with a full time team doing this, it takes over 90 calls to get someone that is willing to sell the property to us.

Mike DeHaan: [9:34] But it does happen, and that is for our trained team. So realistically for you, it could be thousands of people, could be five. You just never know until putting in the work. But going through that process of talking to all these individuals, you will start to, you know, get better at talking to people, get better understanding what kind of situations real estate owners are in, what kind of people might want to sell. And ultimately, you will eventually find somebody who's willing to sell you their property. Once you find that, you're going to do the same process that you did. If Sean was during the warm lead sort of scenario, right, you're going to figure out if it is a distressed individual that would make more sense selling to an investor. In that case, you'll get a signed contract, then you will pair that up with a buyer who will pay you a assignment fee for that deal. Or if it's a realtor style lead, the house is in perfect shape, then you're gonna make an introduction to your realtor friend, and you're going to let them know that you're hoping to get paid for the deal. Cool outreach. You can start to reach a lot more people very, very quickly. Their conversations are hard. You will get people to swear at you. They get upset. They don't wanna talk to you.

Mike DeHaan: [10:33] That's kind of part of the deal, but it is what it is. K? That's how we're gonna make money. That is the hard challenge you're gonna overcome, which you're gonna get paid for down the line. So hopefully now, you've gone through those few couple of things. You have started to maybe make some money. You're putting a little bit aside in the bank. Now you are ready to start talking to more motivated individuals or start talking to people to start contacting more people more regularly. And the easiest way to do that is gonna be through paid marketing. And so paid mass marketing, there are a couple of different ways you can do that. Either you can send people letters, and this is what we do a lot in our business, what I recommend for people that want to maximize the number of people that they are hitting for the effort, or you can hire a cold calling company, which will basically be the same as doing cold outreach, except you're gonna be paying people to do that for you. And so when it comes to either of these things, there's no right or wrong options. A cold calling company, you only use called Simply Leads, $2,000 a month is what they charge, just so you're of prepared for that. They do all the data and everything else, and that give us an average 40 to 50 leads a month. And those are people that have already been screened by the cool callers and are more willing to have kind of like that offer conversation.

Mike DeHaan: [11:42] And so that's one way you can start. Direct mail is going to get you the most motivated individuals. And what direct mail marketing typically looks like, you're gonna go and use that same list provider that you used for the cold leads. You're going to pull all the lists in that system that come from things like bankruptcies, people with liens, people with tax delinquencies, people are getting divorced, the absentee owners, again, have vacant properties, all that sort of stuff. And you're gonna send all of them a letter that very simply just says, hey, this is my name. I am looking to buy properties in this area. I'm very interested in your property at 123 Main Street. Would you be interested in considering offering that property? Please call or text me at this number. And I send that to every single one, you will probably get, I don't know, say, like, half a percent of the letters that you send out will call you. So after you send out, 3,000 letters, probably, like, 15 calls back, which would be pretty great. And then hopefully, within those, you will find somebody that is willing to work with you and sell you that property. It's not a guarantee. There is obviously a lot of variance that happens between the markets, the kind of people that choose to call, you get a lot of people calling it asked to remove from your list. That's all part of the game.

Mike DeHaan: [12:53] It is a numbers game. You've got to keep doing it over and over and over again. On average, my company sends about 4,500 letters for every deal that we get. But the profitability on those deals is typically over $20,000. And so for us, it makes sense to be spending that money because we always get a positive ROI. And so you start to stack that up. And then in an ideal space, if you have a decent amount of money you're willing to spend, I would spend $3,000 in direct mail. I would spend the $2,000 on that cold calling company. And then you're gonna just sit there and work the leads as they come in, And you're gonna have as many conversations as you have, and just wait for the ones that are ready for you to contract, and then assign somebody else or refer them to a realtor. And that's how you're gonna start to make your money. Ideally, you're gonna be doing this until you get up to about a $100,000. Once you get a $100,000 in your bank account, then you can start to look at things like buying rental properties, taking down flips where you're actually going to be, you know, closing on the property, fixing it up, doing things that have a little bit more risk, but a little bit more upside. But it's very important that you focus on just the transactional early phase of the business until you get a $100,000 in the bank. Otherwise, what can happen is you can buy one of these properties, it can eat all of your money, you can stuck holding on to it for a long time with very little return, and you just basically ruined your chances of doing anything over the next quick while. Right?

Mike DeHaan: [14:11] You can be stuck at that property for a very long time. Like, literally right now, I have a property that I bought that I probably shouldn't have that I've been trying to sell for eight months. And, you know, the fortunate thing is because I do a bunch of deals every single month, it is not really that big of a deal, and I can just eat it. But if that was the only profit that I bought, I would be in a very bad spot. So that's an important thing to keep in mind. So you're at that phase now where you have leads coming in, you're having conversations, you're doing all sort of stuff. That should be enough to get you started. And then you continue doing that until you make that $100,000, like I said, and then you're kind of off to the races. You know, and there's obviously a lot of other stuff that happens in the middle. Course, it's not as simple as it exactly sounds. You're gonna have a lot of ups and downs. There's a lot of work that goes into it. People in our scale community, if they kinda go this hustle route to start on average just to set you up so you know what to expect, take between six to eight months to get their first deal. But once that first one comes across, it builds that confidence. It tends to open the floodgates, and a lot more can come significantly faster after that.

Mike DeHaan: [15:08] And, guys, it's really not rocket science. Just like any business, it comes down to your lead generation, aka marketing, and your sales, being willing to talk to those prospects and figure out how to make money with them. And once you conquer that, you would be surprised at how quickly you can start to add zeros and or commas to your bank account. And I mean, it is not uncommon for people within two to three years of starting to phase out to have businesses that are spinning off close to a million dollars a year. And realistically, they're a team of like two to three people. Don't believe me? Go and listen to my podcast collecting keys. Hit me up on Instagram at Mike underscore invest. I'll send you some some screenshots of people that are in our scale community. It is not an easy business, but it is a fundamentally simple business if you're willing to put in the work, take a little bit of risk, and put yourself out there a little bit. Thanks for listening, everybody. Subscribe if you got any value from this at all. I'd greatly appreciate it. And if there's any video topics you'd like me to dive into regarding real estate, comment below. I would love to have some ideas about where to go with this thing.

Mike DeHaan: [16:09] I appreciate you guys listening. Thanks.