The Science of Flipping - You Don't Need Money To Flip Homes

Episode Date: May 24, 2022

The #1 training and coaching system to launch, grow, and scale your investing business!𝐋𝐞𝐚𝐫𝐧 𝐌𝐨𝐫𝐞: http://www.thescienceofflipping.com Become a 𝐓𝐒𝐎𝐅 𝐈𝐍��𝐈𝐃𝐄𝐑 and get access to exclusive training and resources:https://insider.thescienceofflipping.com 𝐈𝐍𝐒𝐈𝐃𝐄𝐑𝐒 𝐆𝐄𝐓 𝐅𝐑𝐄𝐄 𝐀𝐂𝐂𝐄𝐒𝐒 𝐓𝐎: ✔️ Science of Flipping Academy  ✔️ All the systems and software I use in my business✔️ All the tools you need to run your business ✔️ All my Scripts, Contracts, Spreadsheets✔️ Special Discounts✔️ And Much More... 𝐇𝐚𝐯𝐞 𝐚 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧?Get immediately connected with a team member on messenger:http://split.to/tsof-messenger 𝐁𝐞𝐬𝐭 𝐑𝐞𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐅𝐨𝐫 𝐖𝐡𝐨𝐥𝐞𝐬𝐚𝐥𝐞𝐫𝐬✅ 𝐁𝐞𝐬𝐭 𝐑𝐞𝐚𝐥 𝐄𝐬𝐭𝐚𝐭𝐞 𝐒𝐨𝐟𝐭𝐰𝐚𝐫𝐞: http://bit.ly/tsofsoftware✅ 𝐁𝐞𝐬𝐭 𝐃𝐫𝐢𝐯𝐢𝐧𝐠 𝐟𝐨𝐫 𝐃𝐨𝐥𝐥𝐚𝐫𝐬 𝐀𝐩𝐩: http://bit.ly/tsofd4d✅ 𝐁𝐞𝐬𝐭 𝐒𝐤𝐢𝐩 𝐓𝐫𝐚𝐜𝐢𝐧𝐠 𝐒𝐞𝐫𝐯𝐢𝐜𝐞: http://bit.ly/tsofskiptrace✅ 𝐁𝐞𝐬𝐭 𝐓𝐞𝐱𝐭 𝐁𝐥𝐚𝐬𝐭𝐢𝐧𝐠: http://bit.ly/tsoftext✅ 𝐁𝐞𝐬𝐭 𝐃𝐢𝐫𝐞𝐜𝐭 𝐌𝐚𝐢𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞:: http://bit.ly/tsofmail✅ 𝐁𝐞𝐬𝐭 𝐃𝐚𝐭𝐚 𝐏𝐫𝐨𝐯𝐢𝐝𝐞𝐫: http://bit.ly/tsofdata 𝑾𝒉𝒂𝒕 𝒕𝒉𝒆 𝑷𝒓𝒐𝒔 𝑯𝒂𝒗𝒆 𝑻𝒐 𝑺𝒂𝒚 𝑨𝒃𝒐𝒖𝒕 𝑱𝒖𝒔𝒕𝒊𝒏: “Justin is one of the best trainers in this space. He really gives everything to his tribe.”– Brent Daniels (TTP) “Justin’s ability to connect with people and help them understand what he is teaching, is unparallelled”– Kent Clothier (REWW) “We have been in the trenches flipping homes in Phoenix for over a decade, he is one of the best to do it.”– Sean Terry (Flip2Freedom) 𝐀𝐛𝐨𝐮𝐭 𝐉𝐮𝐬𝐭𝐢𝐧:Justin Colby is the founder of The Science of Flipping Podcast and The Science of Flipping Coaching Program and is an active Real Estate investor having flipped over 1500 homes in multiple markets across the U.S. Justin runs an 8-figure real estate wholesaling business that closes 20+ deals each month in multiple markets across the U.S and has helped 1000s of clients learn how to become successful real estate investors. Justin subscribes to the philosophy of "Wholesaling To Wealth" and is the foundation of his coaching program which teaches you how to get started wholesaling or streamline and scale an existing wholesaling business as well as build long term wealth through wholesaling, flipping, and building a rental portfolio. Subscribe To Justin Colby:http://youtube.com/justincolby View All My Videos:https://www.youtube.com/c/JustinColby/videos  

Let me tell you what the number one biggest myth in real estate is. Ready for it? It's that you need money to get into the game. You need money to rehab flip. You need money to buy and hold rentals. It's just incorrect. What's up, everybody? Welcome back to the Science of Flipping podcast. I am your host, Justin Colby. And on this episode, we are going to be talking about the number one myth of the real estate investing

world, and that is you need money to get started. You need money to rehab flip homes. You need money to buy rentals. You need money, and it's just not true. I've done almost 2,000 transactions. Hopefully, that record breaks here this month, and I've done roughly 600 rehab flips I have bought 14 rentals all of which I've done with little to none of my own money yes in the last 15 years there are deals that I have bought with my own money I understand that but to get started I didn't if you haven't heard how I got started let me me refresh your memory. First of all, I was broke, busted, and disgusted. I mean it. Like, as broke as it gets.

The bank foreclosed on my home. I was sleeping on a friend's couch. The repo man took my car, and I walked away from $40,000 of credit card debt. I mean, I literally had nothing, including no income. Now, I knew I wanted to be a real estate investor, and I was determined and committed to do so. So I was unwavering in my action. The intention I had was to become a multimillionaire, and here I am, a multimillionaire. But I knew it was going to take time and a lot of action, and so I just went to work.

I quite literally didn't know what I was doing. I had no coach. I had no mentor. I had no mastermind to be a part of. I had no money. And so what I did was I just started making calls to realtors. Back in 2007, when the economy was really combusting, realtors was the only avenue that I foresaw that I could go out and get a deal. Now, how does this all have to do with money and not needing any of your own money? Well, the reason being is while I was broke, busted, and disgusted, there was something called transactional funding. And it's still around, it's just not as prevalent well that transactional funding helped me buy my first deal and resell my first deal all within about 48 hours right i didn't need any of my own

money it roughly cost me two points of the purchase price and i resold it for a seven thousand dollar profit in my pocket almost immediately after i did the exact same thing. Not a single dollar and I made another $7,000 that went directly into my pocket. Now, that's back in 2007. Nowadays, a lot has changed, a lot's different, but one thing remains the same. You don't need money now one of the things I've done over my career is I've raised private money sometimes they are lenders and then sometimes they are actual cash or capital partners is what I call them so depending upon how this structure they either get an interest rate just like a banquet or they actually get to come into my business and partner on the profit side of things as a capital partner.

Now, that being said, there is money everywhere. The challenge is, and why everyone believes that you need your own money is because they just don't know how to go find this private money. Quite literally, it is everywhere, and one of the easiest places to find it is right here through social media. Some of you guys are watching this on YouTube, which make sure you're subscribed to my YouTube because I drop five videos a week. Some of you guys are listening to this on iTunes. Make sure you give me a five star review. Either way, social media has made a massive impact for me and for many of my students to raise capital. Now, how they raise capital, again, whether they raise it as a bank and private money as a loan

or private money as a capital partner, it's really up to you, up to me, up to how you wanna structure it. But that is just one way that you don't need any of your own capital. Now, we also have hard money lenders, more traditional hard money lenders. Now, gone, well, I don't wanna say that. It used to be hard money lenders, more traditional hard money lenders. Now, gone, well, I don't want

to say that. It used to be hard money lenders were really hard money, meaning really, really expensive, like 18% interest. Nowadays, you can range roughly from 9% to 12% is a really common hard money lender. While yes, it is more money than maybe what a bank would charge you, they don't use your credit score. They only lend based around the asset itself. And you're not really keeping the money for very long. You're looking to rehab flip this property most likely, right? Or wholetail this property. So you're really only looking to keep the loan maximum six months, right?

Maximum. So it's just about math. Now, these hard money lenders typically will ask for 10 or 20% down. Now, right back to point number one. Private money can be the bridge between the hard money lender, your down payment, and the rehab cost. So I tell you now, the number one myth is only because it's how you are thinking about it there's nothing else involved you just don't know how to structure these things so you think you

need the money is simply incorrect you're telling yourself a story that i need to have money to flip or you know i don't have good credit so the bank won't lend to me. That's just incorrect. You just don't know better. So you're a victim of your own thinking, belief system, and knowledge. Nowadays, hard money lenders actually will even lend on rentals.

Now this is the craziest part because last year I bought 14 rentals without a single dollar of my own with a hard money lender and no, it wasn't 12% interest and private capital partner. Now, what that meant was is there are certain hard money lenders, and I don't even know if I'd call them hard money. Maybe they're soft money lenders at this point that do 30 year loans at roughly 5%. Now, yes,

as I'm recording this episode, the interest rates are getting crazy. The Fed is spiking interest rates. And could this change depending upon when you watch this YouTube video or when you listen to this podcast? Yes, it could. But the reality is, even at 5%, a long-term rental makes all the sense in the world when I bring in a capital partner, and yes, partner, who comes in with me to buy these properties. We set up an LLC, we borrow from the hard money lender, and we're able to buy 14 rentals all in one year without a single dollar of my own. Again, this is where I just believe the biggest

myth is not because people are lying or spreading a rumor. It's because people just don't actually know any better. They're only able to think about what they know, which would be more traditional financing, like a bank that needs money down and things like that, where you wouldn't be able to bring in a capital partner per se to get a personal loan. This is a very viable business. I'm on a mission to make sure people are not one trick ponies. And what that means is wholesaling as an industry has been really blown up. There's a big magnifying glass on it, but really the vast majority of real estate investors are wholesalers. And the reason that is, is because it's been highly marketed as no cash and no credit.

You don't need any of those to wholesale. Totally correct. I wholesale roughly 10 to 20 homes every single month, and I don't need any cash or credit, and I don't need to buy the home. There's no risk involved. It's a brilliant business model. But I'm also rehab flipping. I'm also buying and holding at the same time with none of my own money. I actually

have an event coming up called the REI Masterclass in Scottsdale, June 24th, 25th. Make sure you go to the REI Masterclass, get a ticket. Hopefully when you see this, we still have early bird pricing. It is only for a week long. So hopefully you are able to see this and listen to this this week so that you can get the early bird pricing but even if you don't make sure you're at this event it is a live event only a hundred people in the room and we are gonna be going over this idea of a active income business which is wholesaling rehab flipping because you need to be able to bring in a whole bunch of money so that you can have options on how you're investing that money. So we're going to be going over how to raise

private money is going to be a massive topic, how you can actually find the sellers, how you're able to invest the money that you're making. What are the right marketing strategies? How do we set up our pay-per-click advertising on Google? How do we set up our cold calling machine? How do we set up our pay-per-click advertising on Google? How do we set up our cold calling machine? How do we do this entire business that is a seven-figure year business with every single vertical, including how to actually do Airbnb with little to no money of your own? Be at this event, thereimasterclass.com. It's in Scottsdale, Arizona, June 24th, 25th. Make sure you get there. TheReiMasterclass.com. Because this is my mission, to make sure you guys understand, you don't just have to be a wholesaler. You can flip, you can do wholetail, you can do Airbnbs,

you can even buy and hold with none of your own money. It's just about maximizing the opportunities that you give yourself. What I love about wholesaling traditionally is it's really an opportunity business. Find as many opportunities as possible, specifically sellers, and then wholesale them off. Well, now I want you guys to really know and believe you don't have to wholesale it.

You might be able to flip it or wholesale it or do an ovation, do a sub two, make sure you do an Airbnb or a long-term hold. You can do any of it because you're simply maximizing the opportunities that you were given. That's why this episode is so timely and so close to my heart. Because to this very very day after 15 years in this business You know 2,000 transactions almost 2,000 transactions Very rarely do I use any of my own money for any of these deals and it's because I just know better So if this made an impact on you make sure you like it right here on YouTube and subscribe to the YouTube channel Make sure you give me a five-star review on iTunes But even more importantly guys go to the rei masterclass comm get a ticket meet

myself my team and some of the top experts like TJ to Johnny Amy majority Jamil damn G we have some of the top experts in our space gonna be teaching and speaking tactical information for you to build a seven-figure-a-year active income business. So make sure you are there. I look forward to seeing you there. Come up to me and say, hey, I watch your YouTube or listen to your podcast, and that's why I'm here. That would mean the world to me. So hopefully I see you guys there.