One of the biggest excuses I hear from investors is that they don’t have enough money to get started in investing or they can’t do any deals right now because they’re low on money.
In fact, I was just at a networking event talking with an investor who told me he was taking some time off because he was short on funds.
Now, every time I hear something like this I want to laugh.
Isn’t the point of being a real estate investor to generate these funds by buying and selling houses? How are you supposed to ever do this if you’re taking time off until you have the money? Obviously this makes no sense.
But here’s what I told the guy I was talking to and what I tell all new investors: When you start out in this business almost all of us are broke. But we have to remember that in addition to being real estate investors we’re entrepreneurs. And entrepreneurs move ahead no matter what and solve problems as they come along.
What I mean is, go find the deal and then worry about how to finance it and how to get the money. Don’t work your 9-5 job until you have $20,000 saved or whatever amount you think you need.
The money will come…
Instead, market for deals and when one comes along the money will come out of the woodwork, I can promise you this. If it’s a quality deal and the numbers work then you should have plenty of investors willing to partner with you 50-50 on it.
This is how I started out in the business by splitting the profits with a much more successful investor in my area.
The funny thing is, it still amazes me when investors don’t understand that 50% of something is a lot better than 0% of nothing. Over the years, as I’ve become more successful, I’ve split many deals with investors. And it still blows my mind when I tell an investor that we split it 50-50 and he refuses and walks away.
What you should have…
However, do make sure that when you find a deal and someone else provides the money that you have a written agreement stating how the profits will be split. Also, be very careful who you work with. If you attend your REIA meetings on a monthly basis, you’ll become very familiar with the “players” in your area. But if somebody approaches you, who you don’t know from Adam, then do you homework on them.
It all boils down to this. Stop making excuses and get out there. Find the deals and worry about getting the money later. If you really want to be a successful investor and entrepreneur then you’re going to have to learn how to build up your risk muscle.