Can I be a real estate investor with no money?
Yaneek Page, Contributor
QUESTION: I am currently unemployed, broke with little assets - no land title, an old car title - and I wish to start a business. Any ideas as to how I may go about this? I want to become a landlady.
BUSINESSWISE: Starting a business with little or no money is difficult but not impossible. In fact, there are many examples of businesses locally and internationally that were started on a shoestring budget, from which you can draw inspiration.
One recent local example that comes to mind is Wing King, a fast-food company specialising in chicken wings that was started by Christopher Morgan a few years ago and had almost immediate success. In 2011, I staged an entrepreneurship summer camp for teens and invited Morgan to share his entrepreneurial journey with them. It was one of the most fascinating stories I had ever heard and the students were incredibly inspired. He began his presentation by writing two points on the board:
1. No money
2. Can't cook
He started his business with no money, and he could not cook. The story in a nutshell is that he loved chicken wings and learned how to prepare them by watching online videos and experimenting with various sauces he concocted.
He used his existing network of friends and family as the 'taste testers', and they eventually became the first customers for his home-based business. Within months he had created a sizeable and fanatic customer base, and was able to expand operations outside of home.
Importantly, he had no formal culinary training but utilised free online videos, available from YouTube, to hone his craft. Apple, Amazon and Disney are some of the world's most successful and well-known companies, and they were all started by young people, out of a garage, on a shoestring budget.
No significant capital
By now you should realise that it is possible to create a highly successful business with no significant start-up capital, so there is hope for many persons like yourself who want to start a business but have no money.
However, the outlook is not that positive for becoming a landlady, which is your ultimate goal. Real-estate investing involves acquiring property for rental or sale with the aim of making a profit. It requires knowledge of the industry and market, a good network of contacts who can alert you to deals and opportunities as they arise, and an understanding of real-estate investment risk and reward so that you can properly assess prospects. It is also capital intensive, particularly in Jamaica where financial institutions generally do not offer 100 per cent financing in this area, and accessing loans to buy property is challenging even for persons who are employed and have some amount of savings.
Frankly, real-estate investing is not feasible for you now. That you are unemployed with no capital will severely restrict your ability to start.
However, given that you are interested in starting a business, the critical questions to ask yourself are:
1. What are my talents, skills or passion?
2. What problem can I solve, or need can I fulfil, or opportunity can I exploit?
3. What businesses can I start on a shoestring budget?
When you do come up with another business idea feel free to contact me again, so that I can suggest specific ways to fund the business and get to market, based on the industry.
Before you start brainstorming let me make it clear that establishing that a market exists for your business is more important than seeking funding to get your business off the ground. In my experience as an entrepreneurship trainer I have found that too many persons believe lack of capital is the biggest challenge for their business, when in fact it is not. An important factor often overlooked is that the demand for their goods or services either does not exist or is too small to sustain the business.
I suggest you seek some guidance and assistance from the Jamaica Business Development Corporation, which is the government entity that offers business advisory services, technical support and business incubation. They have locations islandwide so visit their website - http://www.jbdc.net - to find the office closest to you.