Money is Always Needed in Real Estate

As real estate investors we need to have access to money. The amount of your own or others money will depend on the transactions your involved with. I know you always hear, “No money down,” “Other people’s money,” “100% Financing.” etc... It’s all over the place and it’s absolutely accurate. You either need your own money, or access to someone else’s money, but money is needed for real estate transactions. You can borrow money from your friends, banks, get business lines of credit, hard money lenders, etc... but you do need access to money in order to start real estate investing, expand your portfolio, and becoming successful.

Real estate investing has to be treated like any other business. There’s marketing expenses, down payments on loans if you’re using financing options, carrying costs, overage costs etc... There are so many different aspects of real estate that even if someone gives you a whole pile of cash, you’re probably going to still need some additional funds.

In my opinion, a minimum requirement to get into real estate investing as a beginner is about $25,000. I believe you need that much money in marketing alone. If you started a franchise or any other business—doesn’t matter what it is—it’s going to take capital. There’s going to be seed capital on the front end, there’s going to be overhead as you expand the business, and there’s going to be marketing dollars to get business.  Now, that can be your own money or someone elses.

I’m a big advocate of marketing. I believe you need at least $2,000 a month minimum to market in order to have a steady stream of deals coming in on a regular basis. If you’re just doing one deal here and there, maybe not, but if you are looking to build a portfolio of rentals, wholesale a lot of properties, constantly have flips going, you’re going to need to put money into marketing over and over and over.

If you can get other people to put up the cash, great. Or you can get a bank or business line of credit, that’s great too. If you don’t, make sure you have some of your own money set aside yourself to expand your business.