4 Funding Sources for Real Estate Investors
One of the hardest obstacles that new real estate investors deal with is funding! Well, I know of several sources and they’re not that hard to get… Most people never take action to start flipping houses because they simply don't know where to get the money to be able to do so!
Not all money has to come from banks. Other sources of funding include:
- Private Lenders
- Hard Money Lenders
- Family Members
When Melissa (my wife) and I first started, we developed a relationship with a mentor that put up the money for the deals and agreed to split profit 50/50. We had to do the marketing/analyzing/closing/rehabbing/wholesaling/etc, but he put up the money to do the deals and pay for the rehabs. That's an awesome deal that a lot of people don't even consider, even though these mentors are available and out there everywhere!
Cut to the day we got our first house under contract... The seller said 'yes'. I was scared out of my wits! My hands were shaking, my heart was beating out of my chest. I was super excited but it was now time to find out whether the money source we had lined up would agree to the deal since I had just promised a seller to pay cash for a house and close quickly. Now I had to actually do that… and we were able to because we had a money source available to us.
Our mentor ultimately agreed to the deal because we purchased it at such a deep discount. We ended up making $25,000 on that deal which meant we got $12,500 for our half of the profits. That money went straight into more marketing and ended up allowing us to eventually flip hundreds of houses over the next 16 years.
Eventually, we struck out on our own and found private lenders that would fund our deals at around 10% interest. They always cover the purchase and repair costs so that we don't have to put any of our own money into the deals. We still use these private lenders today.
Please understand these options are available to you so that you can focus on taking action and really making a go of flipping houses so that you can have the life you want, be your own boss and start working on your business instead of in it.