There is a lot of no money down real estate investment strategies out there. They seem to be never ending. In fact, I think the modern main stream boom in the real estate information business has it's genesis with the first no money down books written by Robert Allen back in the early 1980's. You probably have a lot of the books and courses that I do on this stuff. One thing that happens as you get into the details of the no money down system is that you realize you'll need money for something. Dang it. There's that money thing again. It's hard to escape in today's real estate market, where cash is king.
No money down approaches work well in real estate markets where property values have equity. Where after-repair values exceed underlying mortgages by enough of a margin for a real estate investor to make a profit. The foreclosure boom of recent years has made many of the old approaches to real estate investment of little practical use. The good news is, you can still do 'no money down' deals - at least none of your money down. You see, there are essentially two different tracks you can take with real estate:
* Flip
* Hold
You can flip houses for quick profits (wholesaling, rehab & sell) or you can buy properties and hold for cash flow and appreciation.
In some instances, you may be able to get a property under contract and assign the contract to an end-buyer for a profit. Thus, you don't need any money in the deal. But, God forbid the circumstance arises where you can't find an end-buyer in enough time to close on the deal. Your deal (and profits) then goes right down the toilet. If you're into buy and hold, financing is an integral part of the profit equation. And, if you want to buy and hold more than a few properties, mortgage financing is pretty much a game of Russian Roulette.
Most profitable real estate investment strategies will involve financing. Purchase financing, rehab financing, long term financing. In other words, if you want to make money in real estate, cash is going to be involved.
Ready for the good news?
It does not have to be your cash. This is where private money comes into play. You can raise money from private individual investors for every single deal need you will ever have. Unfortunately, far too few real estate investors go this route. They would rather jump through every conceivable hoop, ring of fire and pit of alligators trying to finagle a 'cashless' deal.
Are you in this camp?
Do you go through every gyration possible, pushing your brain through a spaghetti strainer - trying to piece deals together, where the problem could have been easily solved with cash. It's far easier (when you know how) to raise money from private investors and operate your business out of a position of power versus a position of permanent "hair on fire."
If you only spent a little time on raising private money, and you went about it the right way, you'd tap into the vast wealth sitting and waiting for you. Your business will be completely different. Clinging to old approaches to investing or using techniques that look and sound really good but don't work in the real world is an exercise in futility. Change and evolve with what the market does.
If the real estate market rebounds and home equity values come back up again, your private money rising will take on a compound effect. You'll be hunting with an elephant gun instead of a.22.You'll be fishing with a huge wide net instead of a bamboo pole with a piece of yarn and a hook.
The reincarnation of no money down is none of your money down.
Think about it.
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Adam Davis is a real estate investor, author and speaker. He teaches real estate investors how to raise capital. Adam has completed hundreds of deals- from single family house flips to apartment buildings. He has raised millions of dollars from private individuals. For a FREE audio program on how to get private money go to: http://www.UltimatePrivateMoney.com.
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