00:00what's up you guys it's Graham here so
00:01this video is really meant to be a
00:03real-estate beginner tutorial where I
00:05can really cover the basics and outline
00:07the blueprints of exactly what's needed
00:09in order to prepare for and actually
00:11invest in real estate with this I'm
00:13going to try to keep it as basic and
00:15step-by-step and non complicated as
00:17possible and believe it or not with this
00:20video this is something that you can
00:21begin working on today it's that easy as
00:24soon as you finish this video so I
00:26highly encourage anyone who's watching
00:28now to actually go and utilize these
00:30techniques start as soon as possible in
00:32that way in the future
00:33you're gonna be in a great position to
00:35actually go and utilize all of these
00:36techniques to their fullest extent and
00:38with that you will make money so just as
00:41some clarification here what I mean
00:43investing in real estate I'm not talking
00:45about wholesaling I'm not talking about
00:46flipping I'm talking about actually
00:48owning a property as an investment where
00:51you then get a tenant in there who pays
00:53your mortgage down for you while
00:55hopefully still providing a little
00:56profit on top of that long term and then
00:58fifteen to thirty years from now you
01:00will end up owning that home out rights
01:01you will own it free and clear you will
01:03start making a lot of rental income and
01:05with that you can pretty much just chill
01:07and do whatever the you want and
01:09that you guys is the entire point of
01:10investing in real estate now step one
01:13and this is something I realize I say so
01:15often in my videos but the reason I do
01:17this is because repetitiveness actually
01:20works because people either don't pay
01:21attention they forget they put it off
01:23and it keeps me saying this over and
01:25over and over again for it to sink in
01:26and that you guys is simply just
01:28building your credit score and they
01:31pretty much have a million bajillion
01:32videos I've already made exactly on this
01:35topic so I will just link to them down
01:37in the description but basically you
01:39need a good credit score because lenders
01:41look at that anytime they determine what
01:43sort of loan they're going to give you
01:44and in what interest rate the higher the
01:46score the lower the interest rate you
01:48pay and with that the more money you get
01:50in your pocket every single month and
01:52when you have a bad credit score at
01:54lenders either look at you and say you
01:56know what we're not even gonna let you
01:58because you don't have a good credit
01:59score because you didn't watch Graham's
02:00videos or if they're gonna look at you
02:02and say yeah we can charge you a really
02:04high interest rate if you want that loan
02:06and that makes me very very sad so
02:09literally just not paying attention to
02:11this step and not bill
02:12your credit will cost you a lot of money
02:15over your lifetime and this is one of
02:17these steps you can start immediately
02:18after watching this video so as soon as
02:20you're finished watching the video and
02:21after you've hit the like button on this
02:23video because you've enjoyed it
02:25hopefully go in the description click
02:27the video about credit cards just watch
02:29that and then click the like button on
02:30that one and then begin building your
02:32credit now the second step is to go and
02:34save your money the reality is that you
02:37can't really invest in real estate with
02:39no money down with no credit with salary
02:42finance it just it doesn't really exist
02:45those are unicorn anomaly deals that I
02:48have never myself seen firsthand in the
02:51last ten years of me doing real estate
02:53and probably 999 out of a thousand deals
02:57out there you will need to put down
02:59anywhere between 5% and 20% of the
03:02purchase price have the income to
03:05actually get the loan and have the
03:06credit score to get the loan at a good
03:08interest rate so this means that in
03:10order to actually save money not only
03:12will you be required to live frugally so
03:14that you could save the money that you
03:16make but you're gonna have to actually
03:18make money now I know this seems just
03:21super common sense like notion gram you
03:23got you got to make money but believe me
03:25I get probably five to ten messages a
03:28day from people who ask how can I invest
03:31in real estate with no money down with
03:34no credit with no job how do I do this
03:36and the answer is that doesn't exist you
03:39will actually need to go and make money
03:40to then invest and in terms of actually
03:42making money that's really up to you to
03:44decide how you want to go about that
03:45maybe you want to take the steady
03:47nine-to-five and get the guaranteed
03:48paycheck every other week just so you
03:50could be able to qualify for a loan
03:52nothing wrong with that or you can start
03:54your own business and then try to make a
03:56little bit more money and speed up the
03:57process the choice is really up to you
04:00as long as you actually make and can
04:02actually save money now the third step
04:04here is to actually show your income on
04:07a tax return this means that you can't
04:08just go and have one phenomenal month on
04:10Shopify and then expect to use that
04:13income as a down payment and then invest
04:15in real estate just a few months later
04:16lenders really want to see a consistent
04:18stable long-term source of income before
04:21they end up giving you a loan this is to
04:23prevent people from getting a loan based
04:24off maybe just a few phenomenal
04:26that are unlikely to happen again or
04:28also to avoid high-risk borrowers that
04:31might not be able to make the payments
04:32after a few months and then default
04:34after the first year so in order to do
04:36this you're gonna be needing to show
04:37proof of income on the last one to two
04:40years of your tax returns for me because
04:42I'm self-employed they look at my last
04:44two years of tax returns they take the
04:46average of the income between those two
04:49years and based my loan on that now for
04:51salaried employees oftentimes banks will
04:53look at the last one year of your tax
04:55returns and often the last six months of
04:57your bank statements and then base your
04:59loan off of that but it's really
05:01important to any time you're showing
05:03income on a tax return to not go too
05:05heavy with tax write-offs because
05:07lenders often look at your net income
05:09after all of your expenses now I made
05:12this mistake in 2014 when I went really
05:15aggressive on my tax write-offs I
05:18basically tried to write off as much as
05:20I could to lower my tax obligation but
05:22in 2016 lenders saw my 2014 tax return
05:26they saw all the write offs and they saw
05:28that year was lower in net income than
05:31the subsequent years simply because I
05:33wrote off so much and they lowered the
05:35amount I was able to qualify for because
05:37that one year brought down my average
05:39now thankfully this wasn't a big deal
05:41because the property ended up buying was
05:42within my price range regardless but
05:44this could have been devastating had the
05:46property I wanted to buy was more money
05:48and with that it would require me to
05:50show more income that I might not have
05:52had so what I do to get around this is
05:54that before I file my tax return I
05:57talked to a lender I will have the
06:00lender look over my tax return before I
06:02file it with the state in order for them
06:04to determine whether or not the income
06:06I'm showing is sufficient for the loan I
06:08want to get this works out amazingly
06:10well because oftentimes if I'm showing
06:12too much income I'm overpaying on my
06:14taxes and I can write off a little bit
06:16more but if I'm not showing enough
06:17income I could simply ease off my tax
06:20write-offs and be okay to get the loan I
06:21want to get and then with that final
06:23number what I usually do is give myself
06:24an extra 10% buffer on my tax write-offs
06:27that way it can show a little bit more
06:29income just in case interest rates go up
06:31I can qualify for the slightly higher
06:33payment now the fourth step with this is
06:35to actually get pre-qualified with a
06:37lender and this is such an important
06:39step will save you from a lot of
06:41disappointment what always ends up
06:43happening for the people that don't get
06:45prequalified as they go out they start
06:47looking and they find the perfect spot
06:48they fall in love with it it's amazing
06:50but it's slightly outside what they can
06:52afford and they can't buy it then
06:55everything else they see after that they
06:57compared to that one deal that's
06:58obviously more expensive and a higher
07:00price point that they couldn't afford
07:01and every deal in comparison to that
07:03just looks like crap so just save
07:05yourself the heartache and the
07:07frustration and the wasted time by just
07:09speaking with a lender first it's really
07:12as easy as going to a few different
07:13banks having them run your credit giving
07:16them your tax returns and bank
07:17statements and anything else they need
07:18and they will pre approve you for a loan
07:21based off that information you can then
07:24go and take that rate sheet and go shop
07:27it around in other banks who will run
07:28the same information they will require
07:30pretty much the same things and they
07:32will often beat that loan of the first
07:34place and then you just keep shopping
07:36them around against each other until you
07:38end up getting the best rate possible
07:39now the advantage here of having
07:41multiple banks approve you for a loan is
07:43really two reasons the first one is just
07:45having the security in the event the
07:47first bank can't perform and giving you
07:49your loan and second is you often just
07:51get the lowest price possible on the
07:53loan you get now a lot of people are
07:55worried that by going to different banks
07:57and having them run your credit it's
07:58gonna dramatically lower your credit
08:00score and this is false any time a
08:03lender runs your credit anything within
08:05a 30 to 60 day window after that is
08:07grouped all as one inquiry this is to
08:10encourage rate shopping so that
08:12customers get the lowest price possible
08:14so running your credit score at ten
08:16times is going to have the exact same
08:17impact on your credit as simply just
08:19running it once now as an example on
08:22this working first hand on the last deal
08:23I got I got approved by three banks and
08:26was intending to move forward with Chase
08:28until last minute one of their
08:30appraisals came in low for rental income
08:32and they wanted to give me a slightly
08:34lower loan amount so I ended up going
08:36with my backup option which was the
08:38exact same rate same everything except
08:40their appraisal came in much higher and
08:43I was able to get a much higher loan
08:44amount this saved me from wasting a lot
08:46of time because I had already done this
08:47work ahead of time I already shopped
08:49around the loans and with this I was
08:51really able to get the best
08:53and best loan possible so with this step
08:55five is to really do your research and
08:57see everything on the market in the area
08:59that you want to buy in find out which
09:01areas you feel are undervalued and
09:03poised to go up in price for me I invest
09:06in areas that are just outside of other
09:07areas that have dramatically gone up in
09:09price and seen a lot of dune development
09:11for instance if I see one areas going up
09:14in price massively but if you drive five
09:16minutes away it's like half the price I
09:18invest five minutes away because I feel
09:21like most people will eventually be out
09:23priced of those areas and want to move
09:25just further outside of those areas
09:27where it's a lot cheaper and more
09:28affordable and that in turn will end up
09:30driving prices up there and then it just
09:32continues to expand outward so in order
09:35to notice this and see this just be
09:36really really good at being able to
09:39notice what's going on in your market
09:41drive around all the areas and see where
09:44new restaurants are going in see where
09:45new hotels are going and see where new
09:47apartment buildings are going in see
09:48where things are just generally
09:50improving and prices are increasing and
09:52then just drive a few minutes away from
09:54that also grow and see every single open
09:57house you possibly can on Saturdays and
09:59Sundays the more you see the more
10:01references you have so that when you
10:03actually see a good deal you know it the
10:06more you see the more you know and the
10:07more you know the better you're able to
10:09invest and spot the best deals without
10:11doing this and without seeing a ton of
10:12properties you're really gonna have no
10:14idea what you're looking at because you
10:16simply have nothing else to compare it
10:18to and ideally you'll want to find
10:19something that just needs a little bit
10:21of love just some really light cosmetic
10:23work maybe the kitchen just looks like
10:25crap or maybe the bathroom is just old
10:27maybe the landscaping just sucks maybe
10:30the paint is all spilling off you want
10:32to find some really easy lights cosmetic
10:35upgrades that you can probably do in one
10:36to two months maximum there aren't too
10:39complicated that most contractors could
10:40easily do and these make the best
10:43remodels and these often have the best
10:45ROI once you get into redoing
10:47foundations and rearranging floor plans
10:49and adding square footage and all that
10:51stuff it just becomes a lot more
10:53expensive time-consuming and riskier to
10:55make your money back on especially as a
10:58beginner I don't recommend this if
11:00you're just starting out now step six is
11:02make offers on places you think are a
11:05deal it's really important with this
11:06that you know your price you know what
11:08the home is worth and you've had the
11:09patience to wait until you find that
11:11deal even for me it took me about six
11:13months to find the place I ended up
11:14buying and I lost out on maybe four or
11:16five offers because they had the
11:17patience I knew what the properties were
11:19worth and I didn't want to over spend on
11:21something that I didn't feel was 100%
11:23and also when I bought my first three
11:25properties in 2011-2012 I probably wrote
11:28close to a hundred offers on places and
11:30just low-balled everybody until I found
11:33a few that actually went and accepted my
11:34offer just have the patience to really
11:36take your time with this and do not get
11:39caught up in the emotional rollercoaster
11:40of competing and multiple offers to the
11:42point where you will overpay for
11:44something that's just not worth it
11:46however don't be stubborn don't be an
11:48idiot and look at this with a long-term
11:50outlook over the next 20 or 30 years
11:53overpaying by a few thousand dollars to
11:55get the absolutely perfect property is
11:58going to be worth it you're not gonna
11:59look back thirty years from now and be
12:01like I only spent five grand in that
12:03property it wasn't worth it no if
12:05overspending by a few thousand dollars
12:07is going to get you the perfect place
12:10then otherwise you're gonna have to
12:11spend another year of looking to find
12:13something similar to that where maybe
12:15the market went up five percent and all
12:17of a sudden that few grand you spend is
12:18nothing go ahead and overspend on that
12:21property buy a few thousand dollars
12:22knowing that in the bigger picture it's
12:24going to be worth it don't be penny wise
12:26dollar foolish to pass up otherwise the
12:28perfect deal just because you get
12:30stubborn with it and think you're this
12:32you and think that another deal will
12:33just magically pop up a few days later
12:35it's more important to find the right
12:37property at a fair price than it is to
12:39wait years potentially to find the
12:41unicorn of a deal that you could buy at
12:44a steal because those deals rarely ever
12:47come up and oftentimes people lose
12:49hundreds of thousands of dollars just
12:51waiting around for those deals to come
12:53up and they don't exist trust me I have
12:55seen this firsthand as a real estate
12:57I've seen people wait years to find the
12:59perfect place and in the process the
13:01market goes up 50% and all of a sudden
13:04they're priced out of all the homes they
13:05were originally looking at that would
13:07have worked amazingly well simply
13:09because they wanted the perfect place at
13:11the perfect price that didn't exist now
13:14step 7 once you actually get your offer
13:15accepted is to then do inspections
13:18I recommend doing it as many inspections
13:20as you possibly can just to get to know
13:23what you're getting into and the
13:25condition of the property I usually tell
13:26my clients that these inspections are at
13:28the very least a break-even from what
13:31they're investing for instance if
13:32they're spending $2,000 on inspections
13:35at the very least usually you can get
13:37$2,000 worth of repairs or credits to
13:40compensate you for all the money that
13:41you've spent I also take this a step
13:43further and bring in one to two
13:45contractors to give me actual bids of
13:48what it's going to cost me to bring the
13:49property up to date and fix any issues
13:51the good news with this is that
13:53oftentimes contractors will do this
13:55entirely for free because they want your
13:56business with this they actually give
13:58you the first-hand experience of what's
13:59actually needed what it's really going
14:02to cost and with this you get your work
14:04out of the way because you get bids in
14:05escrow now combining the inspections
14:08with the contractors I know everything
14:10that's wrong with the property from both
14:12a cosmetic standpoint and from a
14:14functionality standpoint and with this I
14:16could then go and negotiate the price
14:19with the seller accordingly depending on
14:20what's wrong with it what needs to be
14:23upgraded and what I didn't anticipate
14:24especially if your plan is to then go
14:26and buy the property and remodel it it's
14:29so important you get these estimates out
14:30of the way early on so you know exactly
14:33what this property is going to cost what
14:34your ROI is and what the property is
14:36going to be worth when you're done with
14:37it now step number eight here is to
14:39actually then close in your property in
14:41the process of doing your inspections
14:43and everything chances are you gonna be
14:44speaking with your lender and giving
14:46them information that they request from
14:48your tax returns bank statements credits
14:50and all that stuff I mentioned earlier
14:52at the same time they're gonna be doing
14:53an appraisal on the property to show the
14:55bank that they're actually lending on a
14:57property that's worth what you're
14:58actually paying the process of closing
15:00usually takes anywhere from as low as 20
15:03days to as high as 45 days depending on
15:05the type of property how involved it is
15:07with the bank and how much work you did
15:09ahead of time before getting your offer
15:11accepted with the bank but once it
15:12closes this is where the real fun begins
15:14step 9 is starting to do your minor
15:16cosmetic renovations this is where you
15:19end up making instant equity because not
15:21only are you buying an undervalued
15:23property in an area that's poised to go
15:26up in price but you're also buying a
15:28property that needs some work where you
15:31by simply fixing it up that's the
15:33trifecta making money and real estate
15:35right there now in addition to that
15:36number four is that the more the home is
15:39worth the more you can rent it out for
15:41which means the more money in your
15:42pocket now at this point most people ask
15:46where do you find your contractors at my
15:49simple answer to this is two ways the
15:52first one is word-of-mouth if I see
15:54someone that remodeled the property I
15:56simply ask him hey who ended up doing
15:59this remodeling who is the contractor do
16:00you mind if I get their contact
16:02information most people are very happy
16:05to give a good contractor more work
16:07because it looks good on them and it
16:09helps the contractor out and in turn
16:11oftentimes the contractor will give the
16:13first person cheaper prices in the
16:15future because they know they're gonna
16:16bring in more business that's number one
16:18simply word-of-mouth just asked around
16:20number two comes from Yelp anytime I
16:24want to look up a different contractor I
16:26simply type in the trade I need look on
16:28Yelp and then look for people who have
16:29really good reviews I then call them up
16:32you get a few bids and few estimates
16:33from a few different people and you pick
16:35who you feel is going to be the best fit
16:37this is honestly how I found my best
16:38contractors so far it's word-of-mouth
16:40and Yelp it's really that easy
16:43and also people ask me how do I know how
16:45much something should cost and the best
16:46answer is simply by getting multiple
16:48bids from multiple contractors getting
16:50one bid from one contractor doesn't tell
16:52you anything if you're totally
16:53inexperienced you have no idea how much
16:55something cost that's not gonna help you
16:57need to get multiple bids and you'll be
16:59able to see the differences in price and
17:01more people come in about the same and
17:03with this you can usually estimate okay
17:06I think the drywall is gonna cost on
17:08average this painting is going to cost
17:10this you can also break it down by
17:12material whereas let's say you're
17:14painting materials are gonna be $500 and
17:16they're charging you two thousand
17:17dollars well this means they're charging
17:19you fifteen hundred dollars in labor how
17:21many people are gonna be there and how
17:23long is it going to take with this you
17:25can usually determine how much the
17:26contractor is making and how much
17:28they're paying their workers so yeah
17:30there's a little bit of math there
17:31you'll probably have to use your
17:32calculator but the more you end up doing
17:33this the better you get at doing this
17:35and then pretty soon you're able to do
17:37the second hand just by looking at
17:39something and also one last piece of
17:40advice is whatever estimate they give
17:43at 15 to 20% more on top of that even
17:46with the most honest contractors there
17:48will always be things that crop up that
17:50weren't anticipated you won't want to
17:52change things you won't want to make
17:53things better and upgrade things just
17:55trust me on this one it's always 15 to
17:5720 percent more than what you think it's
17:58actually going to cost
18:00now finally step 10 assuming you've done
18:02all the renovations you're hopefully on
18:03budget is then going to find a tenant my
18:06favorite way to then go and find a
18:08I love Craigslist I have found
18:10Craigslist is one of the best ways to
18:12get tenants I get a ton of people asking
18:15about my properties it's absolutely free
18:17super easy to post on there and that
18:19believe it or not is how I found the
18:21majority of my tenants I also have a
18:23video of what I do in terms of getting
18:25leads on Craigslist I will link that
18:27video down below in terms of the format
18:28I use and everything on that it's really
18:30easy it's a 20-minute video just
18:32everything is down below in the
18:34description but hopefully at this point
18:35you've been rented the property out by
18:37using my techniques on posting your ads
18:38on Craigslist your positive cash flow
18:40and now you're officially a real estate
18:42investor who's making money every month
18:44and then 15 to 30 years from now your
18:45property's paid off you're ballin you're
18:47living living the dream and and you make
18:50sure you hit the like button so with
18:51that said you guys thank you so much for
18:52watching I really appreciate it if you
18:54guys enjoy videos like this make sure
18:56like I said just to hit the like button
18:57if you watch it all the way through and
18:59you're not already subscribed just make
19:01sure to smash that subscribe button and
19:03then smash the notification bells so you
19:05can be part of the notification squad
19:06where YouTube notifies you anytime I
19:09upload a video also feel free to add me
19:11on snapchat and Instagram and finally I
19:13have a link in the description to a
19:14private Facebook group for anybody who's
19:16interested in real estate real estate
19:18investing agent ding wholesaling just
19:20anything real estate the link is in the
19:22description so make sure to add yourself
19:24to that thank you again for watching and
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