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Updated over 4 years ago on . Most recent reply

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12
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James Davis
  • Miami, fl
4
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12
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creative ways to find finance

James Davis
  • Miami, fl
Posted

Hey guys,

I’m new to real estate and have very little capital, so i was looking into a few ways to create more capital and i came across “leveraging”. Can someone please explain in depth what is leveraging and how do i use it?

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40
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Peter Pham
  • New to Real Estate
  • Arvada, CO
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40
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Peter Pham
  • New to Real Estate
  • Arvada, CO
Replied

Nathan G. pretty much laid out a good example. So far what Nathan said is using OPM (other people's money) that you do through borrowing or raising capital for your investments. What this does is reduce your financial input into the deal and thus increases your return on investment on the deal since you put less into the deal to make more.

But this is only one point of leverage. You can leverage 1) other people's time, 2) other people's expertise, and 3) other people's education. You can pay other people to 1) leverage their time while you work on the more important stuff, 2) leverage their expertise in an area where you're weak to get something done better (could be a partnership), or 3) leverage their education to speed up your learning through coaching/mentoring.

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