What’s the number one excuse of many new investors? It’s the age old…”I don’t have any money”. I don’t have the money to buy a house, to get a lawyer, to go to a seminar, to buy a book, to get some postcards for marketing, to buy some bandit signs and on and on.
Of course it’s all just a lousy excuse. This is the good ole’ US of A and there’s always money floating around if you know where to get it. So quickly, I’m going to show you how to put on your “thinking caps” and find the money you need to get started.
Are You Hanging Out With The Rich or Broke?
My favorite place to get money is friends and family. This is how I got started in the business. I got a nice sized loan from a relative. When you do this, make sure and draw up loan documents and make it “official”. You don’t want there to be any question at all about the loan amount or the monthly payments. What if everyone you know is broke? Well, guess what? That should be a major red flag in itself. I don’t remember who said it, but “a person’s income is the average of his five closest friends”.
That’s why you should be hanging out with all of the “rich” investors at your local REIA meetings. If you haven’t been hanging out with wealthy investors what I’m about to say might not make sense, but it’s true–The wealthy think and act very differently than the average person.
And when you start to hang around them, your perspective will change too. You will look at things differently and most importantly, you will think bigger. Your dreams, goals and ambitions will only increase. Perhaps you wanted to only buy 5 houses a year…but after hanging out with your new “friends” you realize there’s no reason you can’t buy 20. Or maybe you wanted to make an extra $50,000 from real estate this year, but now you know you can make $250,000.
How Much Do you Want To Prosper?
Okay, back to getting you money. The second way to get money is through all of the new peer-to-peer lending sites such as prosper.com. I’ve only used prosper to lend money to others, but it appears rather easy to get a loan. If you have bad credit, you’ll just have to pay a higher interest rate. Plus, there are several of these different sites so there is no reason you couldn’t go get a $2,500 loan from four different sites if you needed to come up with $10,000.
Thirdly, you can have seminars and try to bring in private investors. Or place ads in the newspaper to attract private investors. Now, I’m not a lawyer, but be very careful when you do this. There are many “gurus” who pitch this method in violation of SEC laws. So, make sure you consult with a lawyer so you don’t get slapped with a fine or end up in jail (the SEC has a ton of laws about the way you can advertise for private money and the number of private money lenders you can have).
One of The Best Ways To Get Money…
Another way that I love to get money is by joint ventures (partnerships). Let’s say you found the perfect property but you’re broke. Well, just bring in a partner with money and split the profits of the deal 50-50. Actually, depending on how much the partner wants to be involved you can split it 70-30 or 80-20.
And the last way to get fast money? Sell stuff. I’m sure you have a closet or a basement full of junk. If you haven’t used “it” in a year, that’s your cue that you need to get rid of it.
Now get out there and start raising money. And if you find a great deal, BiggerPockets.com is the first place you should look if you’re thinking about joint venturing. I’m sure there are many wealthy investors who’d love to invest in a profitable deal.