I’m Losing Too Much in the Stock Market
I was speaking with one of my investors the other day and he told me “I have $150K that I pulled out of the stock market and it’s just sitting there doing nothing. Take it and invest it in Real Estate. Just do whatever you want with it. I trust you.”
This is a great place to be and this will happen to you as you develop your investor network. Building a strong investor network will provide you with lots of cash that you can use to really grow your investment portfolio. The most successful Real Estate Investors I know are highly leveraged. In general, I find that the less you put down, the higher your Return On Investment (depending, of course, on the interest rates you are paying for your loans. You will make less in gross profit on a particular deal but you will do more deals at a higher return. (one exception to this is when you have a Lease Option deal where the Tenant Buyer want to put down a large Option payment)
There is a lot of money to be made in Real Estate investing. Using Other People’s Money (OPM) is one of the best strategies you can use to assist in your purchases. For example, assume you have $100K of you own money to invest. This means you can buy 4 $250K properties with 10% down. But then you are done. If you use your investors money, you can still buy 4 properties of $250K using your investor’s $100K cash for the 10% down. Sure you have to pay them a higher rate of return (10% – 15%) but when you run out of money from one investor, you just have to find another investor. Once investors find out they can get up to 15% return on a passive safe investment, you will have them lining up at your door wanting to do business with you. Always make sure that your investments have a positive cash flow after all expenses and loan commitments are taken care of.