Where to Find Money to Invest

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So when looking to invest, the biggest challenge I always hear from first time or potential investors or early rookie investors, is where do you find money to invest?

A lot of that has to do with understanding how people are looking at investments.

For example, one of the first places you can look for money is in your home. Now I know a lot of people are worried about taking money out of their house. What you can do is you can refinance your house through what's called a home equity line of credit. You can pull some of that money out and you can use it for investments. And when I say use it for investments, I'm not talking about putting it into another property. I'm talking about using it to generate activity where you can go out and raise money.

The biggest thing you want to do when looking for other money to invest in joint ventures.

You're looking for people with money. You're raising capital, you're entertaining and you're talking to money partners.

What that means is you've got to go out and you’ve got to network with these people. You don't want to put a lot of your money in these investments, certainly not any kind of income investments.

I hear all the time where people buy a property. They put so much down on it. After two or three years the property has appreciated in value. They refinance it, they take the equity out, and then you'd do that again.

The problem with that strategy is you're really overleveraged. You're always at the maximum leverage point of your investment. Meaning you'll have an 80% loan to value financing on your property.

What you want to do is you want to reduce that exposure and you want to earn a lot of cash upfront. And the way you do that is by going out and raising money.

That is where you find money to invest. There are other investment strategies that you want to bring your investors into where they would go and they would qualify for a mortgage or they would qualify for a home equity line of credit. They would give you the money and you'd take that money and go out and invest and do something like a fix and flip or like a lease option or a sandwich lease option because you want to leverage their money. They are happy as passive investors making 7, 8, 9, or 10%. You are an active investor and want to make a lot more money than that. So you want access to that cash.

Access to money is a lot more important than the cost of money. Assuming of course that the business model works, meaning that, you know, you're going to actually make a return on your investment.

By using other people's money, you're going to get a higher return over the long run. That’s how you're going to be making more deals. 50% of a hundred deals are a lot better than 100% of three or four deals.

That's really how a beginner investor gets stalled because they try to do all the financing of all those deals on their own. They're afraid to give up any of the profit to another investor.

So this is how you would structure going out and getting money for your investments.

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