Positioning Your Money
The first thing you absolutely must do is to put yourself in the proper financial position to make money. I’m sure you’ve heard it time and time again, but good credit is vital in order to make anything significant happen in the business world, as an entrepreneur or just in general. Don’t look at it as a “Oh, I can go out and buy X, Y and Z”, but as setting up your playing field.
Once you learn to properly position yourself, then you can make the types of moves on a whim that a mogul makes. You have to position yourself as an individual, and as a for-profit operation.
The first thing you want to do is pull your own credit report., and now days, you can use several services online to obtain free copies of your report once per year (freecreditreport.com, annualcreditreport.com, etc.). As I understand it, 800 plus credit pretty much gets you anything you want. I do not know how these “gods of finance” get up to the 800 level, but you can at least get to the 700’s strategically, if you’re willing to bite some bullets and take some pain (by the way which our current economy does not seem to want to do).
If you got some dings, like everybody does, the first thing to do is to start to methodically repair those dings. Especially in today’s financial climate, creditors are more anxious to collect on debts, so use this to your advantage. Of course you have to live, but make good, solid pragmatic moves, and try your best not to incur any debts that you cannot see how they will benefit you in the long run. It’s OK to use debt to invest in something that will return profit; it’s death to use debt to satisfy personal wants and needs.
If you’ve never owned a home before, look into first-time homebuyer programs; they should be available in every state. Even consider possibly moving to another state (if that’s possible) for a state where you know you can make an income and has entry level programs for homebuyers. Don’t just jump on the first thing that comes up; take your time, do research, and look for something with built-in equity (where the seller is willing to give up a deep discount) or something that might require “sweat equity” (you may have to do some degree of work that the seller does not want to do). “Sweat equity” is negotiable either by A) asking the seller to lower the price based on the amount of work to be done or B) you can ask the seller to pad some cash into deal on the back end in order to cover what the repairs will cost. This is even better when considering you can get your repair budget wrapped up in the deal and rolled into the financing, so that you do not have to come out of pocket for those expenses.
You may want to consider taking a roommate to help with the monthly expenses, so that you are not just coming out of pocket for monthly expenses and repair expenses too. Even better if the roommate is somewhat handy and can help with a few repairs in exchange for something on rent!
Even consider bringing in partners on contributing towards the down payment, repairs or monthly expense, and make sure they get their agreed return. You may be able to get the seller to make concession that help put cash in your pocket to do repairs, or negotiate with contractors to get paid on the back end when you sell. Of course, you will have to offer them more on their return since they are waiting to get paid. The key is to truly value anyone that will make a concession in order to see you get started on your journey!