Don't have money to be a real estate investor?

One of the most common excuses investors make is not having enough money. Instead of going out and finding a private hard money lender, they complain about their lack of funds.

While excess capital is lovely, it is far from a necessity. Many investors get their start without money. This allows them to meet more people and develop more contacts. In the end, not having cash turns out to be the best thing that happened to their business. It may be difficult to see if you are just getting started, but a lack of funds is no excuse not to invest in real estate.

If you don't have hard money, you should focus more on finding deals. By having access to sales, you can find someone to buy them. Your goal at this stage in your career should be to build your business. Since you don't have the cash to purchase deals yourself, you are not in a position of strength. This means you need to find deals and earn a flat fee or a small percentage of the profits. There will not be six-figure rehab profits in this method. You most likely will not see many five-figure deals come your way, but you are generating money in real estate and – more importantly – building your network. This is more important than closing one deal and then waiting six months for your next one.

To find deals, you need to find sellers. Since you are on a budget, you must think of ways to market without spending much money. Start by calling for sale ads on Craigslist, Zillow, and other real estate websites. Every ten calls you make, you may end up with one or two homeowners who may be interested in selling. You should also contact any for-sale-by-owner signs or ads that you see. The game's name for finding deals is to get as many leads as possible. At this stage, the business is a numbers game. You need to put the time in and find deals. Once you find deals, you can find buyers.

Finding buyers is not as difficult as you may think. This stage is more straightforward if you have deals, but it shouldn't stop you even if you don't. You probably know many people interested in real estate who are looking for a way in. You most likely have an investor in the group between your friends, family, and co-workers alone. Business and finances can be complex, but it doesn't have to be. Start by having an idea in place of how you are going to find deals. Here, you can validate yourself by having an agreement ready to go. Next, without private hard money, you need to have a plan for generating leads. The more detailed your project is, the more likely you will find the money you need. Finally, if you are serious about the business, you need to reach out to your closest contacts and see if anyone has an interest in real estate investing. The odds are that someone will.

Start by sending your contacts an email stating your real estate intentions. If you send this to 50 people, you should get at least five exciting replies. Many investors are scared or embarrassed to discuss the business at this point because they have not closed any deals. Every successful investor had to get their start somewhere. All it takes is a couple of deals to go from not having cash to having a network and money for a down payment of your own. You need to take the step and reach out to the people closest to you.

Another way to find buyers is to promote yourself on social networks. One post stating that you are looking for an investor partner will elicit a few responses. In addition to tapping into your network, you can generate local contacts. There are many local networking clubs and groups that are free to join. Even if you can't find buyers, you will meet people that will help grow your business. You can also find local real estate investment clubs. These meetings will often have dozens of investors constantly looking for deals. Find out what deals they are interested in and what area investors may be looking for. You can also network with fellow investors who may have been in the same situation. Listen to their advice and see what works for you in your market.

In most markets, you should be able to find private money lenders. These are lenders who do not follow traditional lending guidelines in lending out money. For example, you can find someone in your area between your realtor, attorney, and local network. They will lend based on the deal, so you must have a deal or a business plan.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

About the Author: Dennis has worked in the real estate industry for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the excellent investment opportunities trust deed investing and hard money loans provided. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have two beautiful daughters and five amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.