Real Estate Investing: Lack of Cash Flow

William Taylor 3m 744 #investing

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Real Estate: Don’t Let Your Lack of Cash Stop You From Investing

Investing in real estate has always been seen as one of the best ways of creating a decent passive income. The housing market has its ups and downs but the generally trend is upwards. Property is a good investment as it is solid, visible and immovable. However, it can appear to be difficult to start investing without having a significant amount of funds to use as your original deposit. This is not to say it is impossible!  The following tips will ensure you can start investing now; even without any funds available:

Real Estate Investing Cash 1

Private Money Lenders

Anyone who has capital behind them and is looking for a way to invest it can be a private money lender.  The aim of lending money to you would be to receive better returns than a standard bank account will offer. You will find that the majority of people who have available funds are not looking to invest them. However, once you have spoken with them they will be able to see the potential in what you are offering. To get them to say “yes” you simply need a well thought out, practical business plan.

Friends and Family

Anyone in this category has the potential to be a private money lender, but it will be much easier to convince them to invest in your business. It is essential to repay any funds borrowed; you do not what to damage these important relationships; they are complicated enough!

Hard Money

There are many people around who will offer you a hard money loan. These are people who will provide short term loans at much higher interest rates than the more recognized financial institutions. They will often add a specified amount to the loan, simply because they can. However, they are unlikely to check your income or credit rating; providing you have done your sums correctly and can afford to repay them, they can be an excellent source of funds to get your investments moving.

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Build a Partnership with Someone Trustworthy

If you do not have the funds but you know someone who does then approach them about being a partner. A partner can supply the funds and have them returned on the sale of the property. They can be involved in the house improvements and leasing all they can leave everything else for you to sort. This arrangement can work exceptionally well as both parties profit from it.

It is possible to mix and match funding from several or all of these sources; whatever works best for you.  The important thing is to plan carefully before committing and then borrow the necessary funds; knowing you can repay them. To maximize your chances of creating a profit you should follow these rules:

Creative Investing

You must look and push for the right deal; even if you have plenty of money to invest. Paying the figure that a property is worth gives you very little room to maneuver when it comes to making a profit. Buying the same property at a price which has been reduced by twenty or thirty percent will create a much bigger opportunity to earn a profit.

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Plan for the Worst

When you have little or no money to start with, you must be exceptionally careful to consider every eventuality before committing to any project. Always allow spare cash in your budget to cover vacant properties or emergency repairs. Keep in mind that even if you play your cards right, we’re talking about real estate investment; there’s a risk involved and you have to be aware of it.

Ask for Help

When you are starting out with no money there will be a constant stream of problems which need to be solved. This will be to enable the purchase of the house, the repairs and even fund the selling or leasing marketing. You must be prepared to give up anything non-essential and ask for help. It is mentally and physically stressful but worth it in the long run!

Just because you don’t have money it doesn’t mean you can’t invest in real estate. You can! You just need to learn how to do it. It’s always a good idea to ask for assistance from an experienced realtor. This way you’ll make the right decisions and you’ll reduce risks.

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By William Taylor and!