Real Estate Investing: $10,000 to $100k FAST & Blunt.

hey everyone kevin here in my last real

estate update we talked about what it

would take for the housing market to

crash

how likely it would be to crash and if

it were to crash how much would it crash

if you haven't seen that video yet i

will link it down below in the

description and in the first comments so

that way you can catch up

but first let's go through this topic

and that is is

real estate investing dead in 2021

or can you still get from ten thousand

dollars to a hundred thousand dollars in

net worth

quickly with real estate now many of you

know me for

covering well depending on how early you

found me real estate

politics or stocks and the reality is

i've covered all of these because they

all connect and they all help you make

money fast

but the issue is real estate by far

tends to help you make money the fastest

now generally people don't like to hear

that because real estate takes a lot

more effort

than stocks take don't get me wrong i

love

stocks but there is a time and a place

for stocks let me give you a

20 second primer here if i took all of

my money with lauren

in 2011 when we started buying real

estate and we put it all into the s p

500 after the crash we would have

tripled our money and turned it into a

little less than 60

000 instead we took that same eighteen

thousand dollars

put it into a house that is now worth

well over two hundred seventy thousand

dollars of equity

just that after selling costs and

everything that is if we were to sell

that house

dump it get rid of it even though we

refinanced it twice and took

money out of it whatever what would be

left over in that house

270 000 after selling fees and

everything

so now you're comparing 60 000 to 270

000 which is obviously way larger how is

that possible well i'm going to show you

exactly how you would try to do

exactly the same thing again in 2021

okay first let's focus on real estate

the very first thing that you have to

ask yourself is

do you have a pre-approval letter the

odds are you probably don't

because most people do not have a

pre-approval letter standing by

you gotta get one you gotta pick up the

phone

and get on the phone with a lender and

go i would love to get a pre-approval

letter can you send me your needs list

a needs list is just literally a way of

asking a mortgage broker which you could

google

mortgage brokers in los angeles whatever

there are millions of them who want to

help you out all over the place right

uh ask them for their needs list and

they're going to ask you

send us your driver's license tax

returns bank statements whatever

you know w-2s 1099s send us your stuff

last two years tax returns let's go send

it all over to them

treat it like a hot potato get this

stuff back over to them

now all you need to do is literally

twice a day

you're going to open up zillow

realtor.com or redfin

or maybe all of them because it doesn't

take that long these days because

there's just not that much that's

hitting the market you're going to have

notifications on on

all of these and you're going to look

for real estate within 30 minutes of

where you live i don't care if you live

in north carolina or san francisco i

don't care if you live in texas

or florida i don't care if you live in

manhattan or you live

in los angeles or san diego and oh

prices have gotten too expensive i can't

get started here

don't care don't even want to hear it

it's a stupid excuse it is what it is

and i was trying to say that to say that

oh i'm trying to show you to go buy real

estate at all the top of the market or

whatever

no that's not the point the point is to

build wealth the point

is the title can you get ten thousand

dollars and turn that into a hundred

thousand dollars or scale this for your

area

the answer in my opinion is yes and the

way you do it is you start with a

pre-approval letter

then you're going to look five minutes a

day at each of these three apps to see

what the new listings are

and you're going to specifically look at

properties that are within 30 minutes of

where you live

ideally whatever you buy is either a two

bedroom two bath or a three bedroom two

bath maybe even a four bedroom two bath

and so that way if you needed to or

wanted to you could house hack the

property which just and look we've all

we

pretty much all know what house hiking

is right now you live in the master

bedroom and you rent out the other rooms

if you don't want roommates then don't

do it that's fine

you can't qualify for a house because

houses are too expensive because you

live in a city

then buy a condo or a townhouse it

doesn't matter start with a studio start

with a one bedroom but stop paying rent

and stop paying somebody else's mortgage

now we're going to go into detail on

this all right

but we're going to keep this nice and

simple and streamlined so get your

pre-approval letter if you can't qualify

for anything and it doesn't i'm not

asking you to qualify for your dream

home this is not you qualifying for your

dream home

look if you're renting a two bedroom one

bath right now for two thousand dollars

a month

can you get a one bedroom for eighteen

hundred dollars a month and save some

money

probably and you could probably own it

right so like you can make it happen or

find what you're renting but don't try

to upgrade your lifestyle by buying

keep your lifestyle modest and find

something that you can qualify for and

buy

if you can't qualify for anything the

problem isn't the real estate market the

problem is you the problem is you got to

get a better job

if you're unemployed you don't have a

job you're not going to get real estate

if you had a job

but now you don't have a job because

you're unemployed or you're laid off or

you're furloughed

you're not going to qualify for real

estate either so you got to fix that

whether that means

retraining yourself getting a license

getting a different kind of job or

retooling your skills

you've got to figure out how to provide

value to society to make an income

and then use that income to qualify for

real estate a lot of people hate the

idea of working for

the man but i'll tell you the easiest

way to qualify for real estate

is having a w-2 job like literally you

can

go to college for four years graduate

with a comp sci degree

get a job in motorola making 80 000 a

year and literally on day one

qualify for real estate how much do you

qualify for

call the lender there's no sense of me

going through it right now the easiest

thing to do is call a lender

the lender's going to go hey well we

want to run your credit let them run

your credit

let them run your credit oh my gosh this

whole crap that i hear some people say

like oh

don't make sure the lender doesn't run

your credit let them run your credit

in this competitive environment they

don't need anybody basically talking

back to the lenders you're never going

to get a pre-approval letter

just let them run your credit make it

very very simple okay so now

you got a job you got your pre-approval

letter you're going to look at

properties twice a day

zillow redfin and a realtor.com turn the

notifications on you're gonna look

within 30 minutes of wherever the heck

you are

stop going outside of 30 minutes if you

do not know whether or not it is safe to

do a craigslist transaction

where you're thinking about buying at

9pm at night first of all you don't want

to live there and b

you don't even want to take the gamble

if you don't know you should know oh i'd

feel safe on that street absolutely i

feel great on that street that's where

you want to be

now you have two choices of things to

look for you have new construction

or you have old construction stuff that

already exists resale homes

ideally you're going to start with

resale homes resale homes require that

you understand

comps if you are looking at

single-family real estate

that or townhouses or condos that means

ideally

you're looking at similar properties

within your same neighborhood condos

look in the same building townhomes look

in the same neighborhood

single-family houses look in the same

neighborhood make sure you look in the

same neighborhood

don't walk too far out of the

neighborhood and look at properties that

are similar square footage

if yours is a three bedroom two bath and

you're looking at five bedroom two baths

that are all the way on the other side

of the city

you're doing it wrong okay you draw a

circle around your neighborhood ideally

within the main street borders it's like

okay well here's a tract home

which a lot of people when they get

started with real estate i kevin i can't

believe you said tractor i don't want to

track home oh my gosh the safest thing

you can buy in real estate is attract

home

because it's the easiest thing in the

world to come stop trying to get the

farm out in the middle of nowhere

and this is not an insult on rural it's

an insult on you can't find comps for

these things

stop don't look for anything unique get

the cookie cutter stuff that everybody

else has

the goal of you buying your first

property is not to become this oh look

at my house

you know fancy show off look at my

upgraded lifestyle you want to get the

clunker okay you want to get

the 10 year old toyota camry and you're

going to recondition the carpet

and maybe do a little sprucing up on the

paint job maybe buff it a little bit

and go drive it for another 100 000

miles that's what you're looking for

so the best way to find that is look for

either condos townhomes or houses that

are built somewhere between 1950

and 2000 now ideally the newer

the better the newer the better because

there's less crap that you have to deal

with

like in 1950 you got to deal with maybe

sewer issues whereas in 2000 you

probably don't have to deal with sewer

issues

it's very simple if you're buying a

1950s or 60s home get a sewer inspection

and that'll solve it then you'll know

did they already upgrade to the sewer

line or not

but the point is you got to start

hunting and hunt for something that's

easy to come again single family or

townhouse same area look around the same

square footage and compare

if flips are selling for 500 000 and

there's a fixer that comes on the market

for 350 000

and it has 10 offers on it and you're

like oh well it has 10 offers on it

it's going for 50 000 over the asking

price it's like

yeah who cares this is like ebay folks

i don't give a crap what the asking

price is i

care about what the final value of the

property is if i can get into

that 350 000 listing house uh get into

it by

paying over paying 50 000 for it but the

comps are flying off the shelf at 500k

now i know at four hundred thousand

dollars i could put forty to fifty

thousand dollars of work into this and

still bump my net worth

by another fifty thousand dollars i'm

not going to sell the property if you

sell the property you'd be much closer

to break even because you've got big fat

selling costs

maybe you'd walk away with 20 grand but

the point is not to flip real estate the

point is for you to get in

build some equity because when you build

that equity guess what you're going to

do you're going to build your credit

you're going to be able to refinance in

the future to get rid of mortgage

insurance because if you're a big weenie

baby and you're worried about paying

mortgage insurance you're doing it wrong

stop being worried about

a half percent or a three quarters of a

percent

extra on your interest rate it's not a

big deal stop looking at your loan from

the

point of view of oh well over the next

30 years bro

you ain't gonna have this loan for 30

years the average person keeps the loan

for seven years

so stop worrying about mortgage

insurance let's just cut to the chase

here and be

real you're willing to pay two to five

percent margin but you're not willing to

pay three quarters of a percent on

on mortgage insurance it's nuts put

three percent down put zero percent down

if you're va

three percent conventional try to get

homeowner assistance google in your area

like ventura county community

development corporation

call them up yo you got any home buyer

assistance options for

moderate income individuals you might be

surprised you might be able to get a ton

of money

literally for free granted to you by the

government as long as you agree to live

in the property

for at least a year check with your

state every state is different but the

point is

get in to real estate and the point is

if you're going to get something that

needs work it doesn't matter

how much over the asking price things

are going for i don't care what things

were listed for in san francisco it's a

strategy almost you list properties low

and purposefully try to overbid two

three hundred thousand dollars people

are like oh my gosh this house was sold

for 300 000

over list that says nothing to me it

says literally

nothing to me what i care about is what

you can

buy it for and what it's worth now if

you're going to pay 450 000

for a house that needs 50 dollars worth

of work and it's gonna be worth five

hundred thousand dollars when you're

done

well then there's no point to buying

that because you literally just

put in a ton of effort to spend fifty

thousand dollars and take the risk that

maybe you had to spend more

which hopefully you don't and guess what

you break even with the neighborhood

that makes no sense

in such a scenario you're better off

two scenarios here this goes into a fork

one you buy new construction

new construction you pay a little bit

over market value but you get 10-year

builder warranties

there's nothing for you to worry about

you just make sure you're not buying

like on the outskirts in the middle of

nowhere make sure you're buying in an

area that's more tried and tested

and that is a downside of buying new

construction is the neighborhood is not

tested

you probably know which neighborhoods in

your 30-minute radius are like the high

quality

really desirable neighborhoods with the

really entrenched like

like safety statistics and everything

about it is great everybody wants to

live in that neighborhood ideally that's

the kind of neighborhood that you want

to be buying in you want to be buying in

the neighborhoods that have

proven themselves so so so important

anyway uh if you do go the new

construction route that's fine

you can do that that's acceptable you're

paying a little bit over market value

but you're getting the benefit of brand

new

big danger with new construction don't

be a newbie woobie

and go in there and start doing all the

builder upgrades i literally want you go

into this new construction

and i don't care if this feels like

pouring acid into your eyes

do the right thing for your money and

your wealth leave the carpet and

linoleum and just live with it

stop trying to go oh now we own the

house we got to do hardwood floor now we

got to do wainscoting and we gotta do

crown molding

it's all a money grab to rip you

off and rob you of your wealth the

reason people go broke in houses is

because

they overspend improving them they do

not act like pros they act like

newbies it's a big mistake do not

overspend on real estate

so uh fork number one is just go new

construction fork number two

you gotta make sure you're doing your

numbers correctly because if you're

looking at a property that has some

nasty paint and carpet on the walls

and you call up a licensed contractor

and i'm not bagging on licensed

contractors here okay i've been

ran a licensed contracting company okay

folks

if you look at a property that needs

paying carpet here's what you do you

call a painter directly call three

banners directly

go to home depot and find referrals to

painters there are people handing out

their business cards all day long

or better yet you paint it on the

weekend you got to scrape the ceiling

get a p100 respirator watch some youtube

videos and go do it who cares if it's

not 100 perfect

or find somebody else to finish it for

you after after you scrape it all down

uh follow precautions yeah there can be

asbestos there could be lead there can

be mold

learn what a p100 respirator is learn

how to protect yourself

from things that aren't really that big

of a deal lead asbestos mold

please it's a joke if you just follow

the correct precautions

as a homeowner there's a reason the epa

gives you guidance for example on how

you can deal with mold yourself

so it's not that big of a deal you got

to deal with the issue that's

causing the problem if there's a leak

it's causing mold call a plumber

fix the leak get rid of the mold problem

solved

you can even do air samples from old

afterwards if you want after you clean

the place up

but the point is things in real estate

seem much

more like a big deal than they really

are so if you go into a property

and you call up a general contractor and

you take the noob approach and you're in

this 1960s property and all of a sudden

the contractor comes in and says

oh you know the electrical system's old

oh you know that's not up to code

anymore oh

you know the plumbing's not up to code

anymore oh you know we should just tear

out all the kitchen cabinets

oh wow those are some old fiberglass

bathtubs oh my gosh we should just tear

all that crap out too

well yeah guess what you're going to get

you're going to get 150 000 whole house

remodel bid

you get what you ask for you call a

licensed contractor you get what you ask

for

now flip the script and i'm not saying

go unlicensed

i'm saying i get on the phone with an

electrician i go yo

i got a property here it's going to be a

rental in the future i just need the

existing electrical system made

safe i'm on a shoestring budget i do not

have money to do everything i just want

this safe i don't want this property to

burn down and i don't want anybody to

get zapped can you do that for me great

come on out do a bid

great perfect what are they gonna do

gfcis make sure there are no faults make

sure the breakers aren't rusted and

arcing

and they solve the electrical issues you

do the same thing with plumbing you

reglaze the bathtubs and the

and you repaint the cabinets instead of

replacing the stuff you put in 50

faucets instead of 500 faucets because

why are you even thinking about putting

in 500

faucets when 50 faucets guess what a 50

faucet does

it makes water flow and guess what a 500

faucet does too it does the same

freaking thing so when

people start putting their heads on

correctly about how real estate

functions and how to make money in real

estate

it's not that hard okay so what about

the title how do you take

ten thousand five hundred dollars on a

property and end up

getting to one hundred thousand dollars

well let's go with the example that i

gave you

which is you find a 350 000

listed fixer-upper i don't care if it's

a two-bedroom one-bath from the 1920s

or a three-bedroom two-bath from the

1980s it don't matter to me okay

newer the better but you don't have to

have a strict new bias so you just have

to be more aware of other issues that

could come up

with older okay so now you find a 350

000

property you look at it and everybody's

like oh my gosh it's going to take 150

grand to fix this thing up

then you look at it from the rental hat

perspective and you get these quotes

like i'm talking about

people like oh kevin we we can get this

done for for 45k because your

electrician's going to do this your

plumber's going to do this

you're going to send in the specific

trades you're going to be dealing with

you're you're gonna be there every day

anyway so you coordinate it put in a

little bit of work

but then guess what you're also gonna do

you're gonna go there on weekends

and do the cabinets yourself do the

painting of the walls yourself scrape

the ceiling yourself

do a little bit of work yourself it's

not that hard

if you be careful by the way with demo

okay everybody wants to go in with a

hammer and start swinging and opening

walls

big mistake you get the city on your

butt

you do not want the sitting on your butt

okay anything that requires planning

you run away from because here's how

planning works

hey yo architect i want to do plans for

my house okay kevin sounds good i'll get

your plans in six

weeks oh could you do any faster sure

i'll get them done in four weeks i'll

just rush them and you'll have way more

corrections

then you submit your plans you're like

yay we submitted our plans

the city takes eight weeks to get back

to you and the city's like here are your

plans

with corrections and then you get your

corrections like cool hey architect can

you do the corrections

sure in six weeks can you do them in

four

okay i'll do them at four you submit

them again you'll wait another six weeks

with the city to get your plans back

and city goes oh we have more

corrections for you and you literally

keep looping down the cycle

until you never want to touch real

estate again so do not touch

anything that has to do with planning

don't move walls

don't do things that require special

plans to be submitted with the city

it's stupid just put the house back the

way it was meant to be

i don't care if the master bath feels

small from because it's from the 50s

i don't care if you don't like where the

wall placement is your goal is to go in

there

paint carpet clean it up put some

inexpensive fixtures in light fixtures

and i'm not saying cut corners i'm not

saying lipstick on a pig

you can do high quality work using

lesser expensive materials

it's just not that hard hey by the way

quick note yeah the market is pretty

competitive and

one way that i've found to put myself in

front of sellers before their properties

hit the market

is with deal machine if you go to

medkevin.com

deals you could sign up for a deal

machine and get some free credits to

send some free

mailers and postcards directly to your

favorite potential listings that are

maybe going to come up for sale or

properties that may come up for sale in

the future

the way i like to identify those is i

look for properties

that purposefully look like they have an

old dilapidated

paint color or maybe even a driveway or

it kind of looks like

the yard's overgrown and beat up but the

windows are new

the roof is new and it looks like the

owners spent a lot of money

on the systems of the house like the

expense of things but they

did not spend a lot of money on the

things that are easy to do

like paint and carpet and weeding i can

do that with my own labor

that's the kind of target i'm looking

for and so i

love sending mailers and i send hundreds

of mailers monthly

to properties that i've specifically

targeted that look like

what i've just described so that i can

hopefully find

many many many many of these deals off

market

check it out by going to medkevin.com

deals all right so

now you are fighting to qualify for a

property and you see one okay it's that

350

000 house it looks like a great deal and

you're like kevin i'm gonna do like you

say i'm gonna put three percent down i'm

gonna put the little down but i don't

have the thirty thousand dollars to fix

it up i've got

maybe a little bit of extra money to get

started on it perfect

then that's what we're gonna do we're

gonna get started little by little on

the thing

and every time you get paid you're gonna

take your money and you're going to do

a little bit more on that property

you're going to paint it you're going to

clean it up and you're going to slowly

clean that place up to where you can

live in it maybe live in one room and

slowly fix the place up over time

you don't have to have 40 50 000 sitting

around

right away get the place to where it's

in a livable state which usually you can

do by cleaning it up and cleaning it out

scrape the ceilings you can do a lot of

the stuff the prep that you need to do

the cleaning the paint

a lot of the stuff you could do for very

very inexpensive costs don't worry about

the landscaping yet don't worry about

the exterior paint

focus on scraping the ceilings clean it

up get the

gunk out of the bathtubs and the trash

out from around the property

paint the thing clean it up and move in

get the thing into a livable condition

and so your goal 350 000 place hits the

market

you buy it for 400 000 because you write

a nice letter to the owners and you wave

some contingencies

so now you put let's say three thousand

dollars down i'm sorry three percent

down

on four hundred thousand dollars you got

a loan of three hundred eighty eight

thousand dollars you put twelve thousand

dollars down

great now you control the property now

over the next six months

you're gonna spend thirty thousand

dollars or whatever capacity you have to

spend

to fix the property up you're going to

do a lot of work yourself if you don't

have the extra money if you've got the

extra money great then you don't have to

do as much money yourself you can hire

the rest out

if you want to hire everything out get

it done for 30 40 50 000

or less it depends how much you want to

do and it depends on the area in which

you are

look if you're in an area in idaho where

houses rent for a thousand bucks

maybe you only spend ten thousand

dollars fixing the place up

a little bit of touch-up paint you don't

even change the colors and you put in

some new appliances and some new carpet

and linoleum you call it a day it's 10

grand you're done you're good to go

if you're in let's say a southern

california house and you want to spend a

little bit more hey maybe you spend a

little bit more

and that gets you to spending 30 000 and

maybe now

you look very similar because you put

your own blood sweat and tears into the

thing

you have a house that's very similar to

property selling for say 500 000

now your basic renovation is not going

to be worth as much of

as a flip but it's going to be worth a

pretty similar

to or pretty dang close to what the

flips are relative to what you were able

to buy it from

so let's say you buy a place for four

hundred thousand dollars three percent

down that's twelve thousand dollars down

now you got a loan of three hundred

eighty eight thousand dollars you put

let's say thirty thousand dollars into

it over

six months so you're into the deal for

430 000

and now all of a sudden your property is

worth not 500 like the flips but 480

let's say

well that just created 50 000 of net

worth

for you see the beautiful thing about

that is because you now

saved money and worked towards spending

the money to fix it up

that is now extra equity as well so 480

000

minus the 388 000 you just convinced

yourself

to save the money to fix up the property

to save the twelve thousand dollar down

payment all of a sudden you have a net

worth

of 480 minus 388 but wait

with inventory how low it is the odds

are after the six months or three

months it took you to fix the place up

the place is probably

worth at least the eight thousand

dollars more in which case if your house

is worth 488

there you go you've got a hundred

thousand dollars of equity in this

property

and what'd you do yeah you put that

twelve thousand dollars down

yeah you saved up to put in that thirty

thousand dollars worth of work or

material maybe it was less

again depends on the area you're in

depends on your capacity to save

but now you've created a hundred

thousand dollar net worth

and you're not going to sell the

property your goal isn't to flip this

what's your goal instead

well after a couple years especially if

the market keeps going the way it is

maybe you refinance in the future you'll

get rid of mortgage insurance

maybe you even lower your interest rate

in the future depends on where we where

we

where we stand or you refinance don't

get any cash out

do a cash out or do a home equity line

of credit

and now you have a big credit card built

into your home where if you ever needed

to

swipe the credit card of your house

you'll be paying four or five percent

interest maybe six percent interest

on a secondary loan against your house

which you can now use to buy the dip in

stocks if you wanted to

but the point is you're now in the real

estate

market and here's the beautiful thing if

you have a 480 000

house and the house just appreciates or

488 thousand dollars let's say

and then over the next year after you

fix it up it goes up in value just

five percent just five percent of an

increase in value

on 488 000 is 24 400

well you put in that 30k plus the 12k

right that's 42k

you've almost in two years you got

basically your money back in net worth

and all of a sudden your net worth is

six figures

rather than oh i put all my twelve

thousand dollars

into options in the stock market and oh

yay i

tripled it and it turned into thirty six

thousand dollars but then because you

were taking on so much risk to triple

there's a chance of you potentially

losing all of it and you go back to zero

or pretty close to zero

or or even half like real estate just

got you to six figures plus

like there's no reason for people not to

start with real estate people bag on

real estate because it's hard to find a

deal

well let me ask you if you think it's

hard to find a deal are you pre-approved

and are you looking twice a day because

if those two things aren't true

yeah probably is hard to find a deal

also

if you are pre-approved and you are

looking twice a day for a deal

and you're like well everything that

just comes up in my market is overpriced

really is everything just selling over

the asking price because maybe you're

not keeping up with the comps

are the comps you're looking at july

comps from last year or are they

february and march 2021 comps where

you're actually up to date on what the

current market pricing is

and the trajectory of the market when

you throw yourself into this real estate

market

you're gonna learn so much more and

you're gonna see the power of being able

to leverage your real estate with just

three to five percent down

and really maximize and do what other

people can't when you put the right

mindset on now if you want more

perspectives on how i handle real estate

check out the programs i have linked

down below

i have a real estate investing course

and a do-it-yourself property management

and rental renovations course

and these programs help save you tens of

thousands of dollars

if you follow the simple steps they

provide in these programs

you all the insight on how to make sure

you're negotiating a deal correctly

and how to get deals in competitive

environments folks

you gotta gotta get into real estate if

your net worth is under fifty thousand

dollars

seriously get into real estate look for

a deal follow the steps

in this guide here don't overspend on

real estate and realize

if things ever go bad with real estate

you can always rent out rooms you can

rent out the building

or guess what happens the government

comes in to swoop out homeowners first

i'm not saying go over pay and i'm not

saying live beyond your means

take this safely it is a real obligation

but your capacity for building wealth is

substantially higher

the lower your net worth is if your net

worth is under 50 000

you should be looking into real estate

and increasing your income thanks so

much for watching and we'll see in the

[Music]

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