Figuring Out Funding at 4-5 AM

3 Replies

It's 5:23 local time here in Washington State. I had to chuckle as I just glanced up and saw that. Everyone in my house is fast asleep and I'm pounding out a "low money down" plan for acquiring property. Blame it all on @Brandon Turner   and his comments about the 4:00 in the morning eureka moments after "sweating in bed" about how to fund a deal. This was on the podcast where he was the guest being interviewed by @Joshua Dorkin   about "The Book on Investing with Low and No Money Down". Or blame it on the pain meds from the surgery I had yesterday. Probably a combination of the two.

Either way it just might work (disclaimer: I'm not endorsing the use of narcotics prescription or otherwise as a creativity or mindset booster). I've found great deals the past month. I've got 3 parcel's purchased outright and 2 through seller financing in the past 3 weeks and 5 more great offers going out, all with a decent shot at closing. We're talking bare land here, between $1,800-$15,000 per property (think "land-flipping" @Seth Williams   strategy-BP Podcast #39). 

The idea is we form an llc with the 2 people who have approached us about investing and pool those 5-10 properties in an llc with us putting in small sliver so we do have at least some skin in the game but getting a much larger share of the pie for doing the work.

It's something that crossed my mind before but I think getting familiar with Brandon's story through the podcast and first couple chapters of the book has helped me see that A) as a strategy forming well defined partnerships using separate entities is a great way to segment our business and B) I don't need a AAAA business rating to legitimately be investable-just a successful track record (we've almost doubled money in 6 months already) a straightforward workable plan and high caliber deals. In fact I was watching the Michael Blank interview before I "went to bed" and he was talking about finding investors with sample deals and I realized my actual deals would probably sound like a far fetched story if they weren't documented history. Why am I not using those success stories to get money?!?

Another aspect I like about "batching" several small deals in an llc is that it diversifies for everyone involved instead of doing separate deals; some over here with Sally and some others over there with Joe and certain ones with my own money which can only end up lopsided in terms of ROI and the time frame of the cashing out on the "flip" (we actually sell both cash and on contract). It evens out risk/reward, time value of money and my partners know I'm in the same boat with them not cherry picking.

Bottom line is I'm starting to make personal the fact that no and low money down investing is not only totally possible, it is possible for me and what I am going to make happen! 

Thanks and great job Brandon, the book really is providing me with a "Rich Dad, Poor Dad" type opening of the mind and personal application that I think you are shooting for. My brother is a board game inventor so when you're ready to turn it into a board game, let me know.

Ever since I listened to that post (which was last week, as I'm late to the game), I have been thinking about this concept more and more. I am currently looking that the possibility of doing one small deal later in 2015 using these concepts. I think before, using OPM always seemed to be scummy and only done to take advantage of someone else...but I've heard enough examples of how it's done right with care for the investor in mind. I'm all for it if it's mutually beneficial to both parties.

Looking forward to sitting down with you and the rest of the Tri-Cities crew!

Thank you Sam. I think I started understanding using OPM as a positive thing a year or two ago after listening to Podcast #1. But it was at a head level and it's moving to gut level, Also, I really needed to prove that I could do it with my own money. Like so many things in real estate partnering/borrowing can be done win/win and the more you make others win the more successful you'll be. 

Really looking forward to meeting you at our next meetup as well!

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