Believe it or not, you can make substantial profits in real estate using little or none of your own cash. But even though the cash might not be yours, it still takes money to invest in real estate. If you don't have the money I'll give you a few ideas where to find it. If you do have money, I have plenty of other articles to show you how to use it for maximum profits and return on investments.
Lots of people want to invest in real estate but don't want to do the work involved in finding the properties and putting the deals together. They may be retired investors who have worked long enough and want to spend their time relaxing, or they may be working professionals (doctors, lawyers, etc.), who want a secure investment with a good return, or they may be anyone who understands the value of investing in real estate. They're willing to fund the deals of people like you who are out there doing the work. They make money and you build wealth – it doesn't get much better than that!
Kevin Haag, a real estate broker who is a personal friend, knows a couple of brothers in Cape Coral, Florida who clean carpets for a living. They saved their money but instead of putting it in mutual funds or stocks, they lend it to people who want to buy real estate. Essentially, they have become the bank, earning a healthy rate of interest, and their investment is completely secured by the property. When the loans are repaid, they find somebody else to whom they can lend money.
These two guys have built a net worth of hundreds of thousands of dollars for themselves, and they've helped countless other real estate investors buy property on which the investors made a profit. How do you find investors like these brothers? It's easier than you might think. Often they advertise in the real estate section of the paper (look under “Money to Lend” or “Mortgages”). Or you can place an ad saying that you're looking for investors. Put it in the financial or real estate section, and keep the text simple.
Here's an example: “Investor wanted. $60K, secured by real estate. Call 304-555-9876.”
It's also quite common for mortgage brokers to have a supply of private investors; just ask. You will also be surprised by what happens when you start networking with your friends and colleagues. Let them know you have a great deal that they can make money on if they're willing to invest with you.
Lester Theiss, a former student of mine, tells me he got his own doctor to commit more than $100,000 in one real estate deal – and the doctor was thrilled to have the opportunity to put his money in a secure investment with a substantial return.
Jim Seneff, now chairman and CEO of CNL Financial Group, started his first business in 1973 with a $5,000 loan from his father. He went on to build a real estate empire with more than $5 billion in assets that spans retail businesses, hotels, restaurants, retirement homes, real estate developments and finance entities. You may think you don't know anyone who has money to invest, but you could be surprised to find that you really do.
“Where can I find the financing I need to invest in real estate?”
Here are just a few sources:
- Retired investors
- Working professionals
- Scan ads in the real estate section for those willing to invest
- Place an “investor wanted” ad.
- Mortgage brokers
The key is to tell people what you're doing and ask. You may surprised just how many people will be willing to invest!