Boston Real Estate Investors Association

How to Raise Money

You need to raise money so that you can make money in real estate.

Other People’s Money

Your return on investment is higher when you use other people’s money. You can use less of your own money when you use other people’s money.

One of the best ways to raise money to invest in real estate is to get your family interested in investing with you. You can also sell your investments to invest in real estate. Lenders want to lend to you. If you can not get a loan from family or with a bank there are hard money loans. You can also use credit cards. Loans carry interest expenses that you need to budget for so that you can pay them back.

You can have a long career starting out with a few thousand dollars and a few profitable properties.

Pick great locations. You can invest in nearby neighbourhoods or pick hot markets.

You can raise money by finding and putting a few profitable properties under contract.

It’s hard to tell where you can find cash flowing real estate deals with capital gains. The internet has a lot of discount properties. The problem with most real estate on the internet is that you can’t go direct to the homeowner. I think direct mail is how to do it.

Build a trusted brand with repeat exposure to investors and sellers.

Investors are excited by the real estate that you have under contract and present to them. It is smart to have a telephone script when starting out. Create a cash flow statement outlining expenses for each property so that investors can decide whether they want to take the risk.

Some real estate professionals talk a lot to try to confuse you. Make sure they aren’t Tire Kickers so that they don’t waste your time. Tire Kickers:

  • Don’t answer the phone
  • Don’t show up for appointments
  • Don’t close a deal when you have what they want

Raise Money Online

When you have a property under contract, you can list the seller online and raise money.

Have a Website:

Blog and have a landing page for investors to fill out their information.

Strategies of Raising Money:

  • Joint Venturing

Negotiate 50% of the cash flow and capital gains with the buyer.

  • REITs

Start a corporation that invests in real estate and issue shares.

  • Subject-To Financing

Use the subject-to financing escape clause in your purchase contracts to buy you some time to raise money.

Reinvest profits to make money in real estate. If you don’t want free and clear property, you can refinance your mortgage to reinvest cash. The rule of 72 tells you how quickly your money doubles. Divide 72 by your return on investment.
Michael Sadler is the Founder of Access The Flock Online Real Estate Marketplace where he helps Real Estate Professionals make money accessing cash buyers and motivated sellers. Follow on Facebook, Twitter, Google+, YouTUBE, LinkedIn Group, LinkedIn Personal.

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