Getting Started in Real Estate While Broke: Going from Mobile Homes to Houses

Buying real estate while broke and living paycheck to paycheck may seem like an impossible task. The truth is, when you are renting and facing possible unemployment or just barely getting by, you may not be able to afford not to buy property. I am going to share my tips that transcended me from renting to living in a mobile home to finally owning my own house.

Getting Started in Real Estate While Broke: Assess Your Situation
The day I found out the company I worked for was for sale was a huge wake-up call. This was a year and four months ago. I was a renter, looking to buy my first house. I had no savings. My fiance worked construction and had just went back to work. The possibility of holding a mortgage in one hand and having an empty hand where a paycheck should be seemed about to crush those dreams. I also faced the problem of possibly not being able to afford my rent. I was preparing for a desperate situation and was not about to go homeless.

A look through the local paper led my fiance and I to a decision. We were going to buy a place to live, for as little money as possible. We were going to buy real estate, while broke. Assess your job outlook and finances, to see if you can afford to stay where you are.

Getting Started in Real Estate While Broke: Lower Your Expectations
When attempting to get started in real estate, while broke, refrain from reaching for the stars. The object is to get you and your family out from under financial burden, not add another bill. The point is to find a starter property. There needs to be space for your family, not all the extras. The goal is to move on as soon as possible and bank money as you go.

For us, this resulted in moving into a two bedroom mobile home. We found the property listed in the paper, for $1,500. Absolutely nothing special to look at, but we would be able to afford it, if the worst happened.

Getting Started in Real Estate While Broke: Find a Property
Getting started in real estate while broke means discovering properties on your own. We have found them by looking in the local paper, checking bulletin boards and just generally being nosy. Pay attention to your town and keep an eye out for unoccupied residences.

If the property is in a mobile home park, ask the park managers or owners who owns it. This could be a person, finance company or bank. If you are looking at a house, ask the neighbors who owns it. Most will be happy to share the information, since the empty derelict home is lowering their property value.

Getting Started in Real Estate While Broke: Thoroughly Look Over the Property
If you are buying real estate, while broke, you cannot afford costly repairs and remodels. Notebook in hand, go over every inch of the property. Look in cabinets, under carpets, the roof, water heater, furnace and pipes. Make sure the structure, flooring and systems are sound. Be sure to note any desired cosmetic changes, like paint.

Getting Started in Real Estate While Broke: Budget Repairs
Go home and price everything that needs fixed or changed. If you can fix it yourself, check prices at home improvement stores. I would strongly recommend, for budget reasons, not taking on a property that you cannot fix yourself. Search on-line for the cheapest way to correctly fix any problems. Consult experts with your findings.

Divide your total projects into two groups. One group should be immediate repairs and the other should be things to take care of after the move. If you are purchasing a mobile home, is there lot rent? Call the courthouse and find out the real estate taxes. Make sure you will be able to afford everything, in months to come. Can you afford this property while living paycheck to paycheck or on unemployment?

Getting Started in Real Estate While Broke: Negotiate Price
Price negotiations are crucial, when getting started in real estate while broke. A couple hundred dollars could be the difference between eating that month or not. Flat out ask the homeowner how low the price can go. Then offer lower. Anyone looking to sell real estate cheaply is generally looking to either unload an undesirable (to them) property or make some quick cash.

List any defects in the property or money owed, that could persuade the owner into lowering the price. The first mobile home we purchased had an asking price of $1,500. We bought it for $830. We convinced them to lower the price, due to extensive repairs that we would have to make. The repairs made and lot rent owed cost us $700.

Getting Started in Real Estate While Broke: Move On and Up
By employing the nosy method of buying real estate while broke, we discovered that a mobile home near us was for sale. I had lost my job mere days before. This mobile home had one extra bedroom than our current one and nicer finishes. We discovered, through the park managers, that a local bank owned it. We called and asked for the price and permission to go through the property. The price was $900, not a bad starting point. The trailer only needed basic drywall and carpeting. The bank was anxious to unload the property, so we were able to purchase the mobile home for $300. We quickly unloaded the first mobile home, having invested $1,500, for $3,000.

Getting Started in Real Estate While Broke: Turning a Necessity Into a Dream
Now we were on the park managers' radar. They automatically thought of us when a trailer became empty. It was turning into a profitable side business. One mobile home was traded to us for a garage repair. We did not move anymore, but that was the only deviation from our plan. Besides, we had our eye on a house.

Even though our finances were stable, we found ourselves unwilling to pay the going rate for a house. Acting as if we were as broke as when we first got started in real estate, we went after our house. We found a property that had not been lived in for years. We knew this for a fact, because we were the last people to live in it. We moved when the owner refused to repair a broken furnace.

After calling the bank, we knew the asking price for the real estate was $7,000. This was for three bedrooms and a large backyard. We negotiated the price down to $5,000. The banker said he would go lower, if we paid cash. We decided to use our savings on remodeling, so we chose to do a contract for deed. The payments are $100 a month, for a little over four years.

Those were the steps we took to get started in real estate, while broke. Easy to replicate, with a little research, budgeting and willingness to make our own repairs. We are now both employed, with a profitable side business and a dream house in progress.