House Flipping 101: Investing with No Money
It just sounds way good too good to be true. But in fact, it is possible to invest in real estate without using any money of your own. How? Mike LaCava, president of House Flipping School explains 4 ways to fund your house flipping business.
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I didn't believe it either at first, but once I started networking and talking to people about investing in my real estate ventures, I discovered that money is, in fact, everywhere. It is possible to invest in real estate without using a cent of your own money.
Turns out, many people are dissatisfied with their current investments and are very open to other ways in which they can get a better return on their money.
Don't get me wrong, if you can get money from your bank, then go for it! But today, we will purposely leave out banks and traditional financing options and discuss ways in which you can finance your very first real estate deal with money not loaned from a bank. Some of these sources of financing are avenues you've probably never even thought of, while others are lying there right under your nose.
Where to Find Money for Your Real Estate Deals
If there is one place the new investor should go when they are first starting out in their career is there local Real Estate Investors Association (REIA) meeting. Although these meetings are notorious for being "pitch fests," if you can around the obvious sales pitches, there are plenty of people at these meetings who are willing to invest with you. Additionally, events organized by the Chamber of Commerce, meetup.com, as well as any business get togethers are also ideal places to meet potential investors.
Option #1: Private Money Lenders
Private money lenders could be just about anyone you meet or know. Private investors are just regular people like you and me who have retirement accounts or disposable income reserves that they are looking to invest. In most cases, they are not actively seeking new investment vehicles – but if you know them and talk about what it is that you do, then chances are very good that they may actually approach you instead of you approaching them.
And if you do approach them about a better opportunity to invest their money, it's very rare that they won't at least sit down with you and hear you out. Provided that you have a solid plan, they are more than willing to listen to and consider what you have to say.
What most new private investors don't know is that there are other options for them to invest their retirement money. So when you talk to them about investing, they may not even think about their retirement accounts like 401(k)s or IRAs that can be rolled over with real estate as the investment vehicle. As long as the transfer of those funds is done correctly, that money can be used to fuel your investments with zero tax penalty to them.