The word is definitely out on the amazing money-making opportunities in U.S. real estate . If you’ve already looked into it and want to get in, you might be at the point of considering how to generate capital. It’s important to keep in mind, having money is incomparable to resourcefulness, determination and persistence. So, for those entrepreneurial steadfast spirits looking into U.S. foreclosures right now, here are the top three sources to get the start-up capital for your U.S. real estate deals: partners, hard money lenders and private lenders.
U.S. real estate essentially offers three paths to pursue cash opportunities: quick cash (buy to sell), flipping (buy, rehab, re-fi, sell) and unit rentals (streams of cash flow). If you are willing to do the legwork, there’s a good chance someone is willing to invest in your U.S. real estate deals. In all of these set-ups, as in any capital venture, you need to perform due diligence.
Partners typically invest money while you invest time and apply expertise. Partnerships are typically with an acquaintance of some sort (dentist, neighbor, attorney, etc.). If you have a sound investment proposal and can demonstrate returns on investments in a presentation, you are well on your way to finding yourself a partner.
Hard money lenders are people who provide loans at high interest rates, often with a few points on the total loans – similar to the concept of a loan shark, but legit. It’s important to be able to demonstrate how you will be able to pay back the interest rates and points for the loan in your paperwork to really close the deal though. Usually, a hard money lender would be conservatively used for quick cash or flipping strategies, to generate some capital and potentially decrease the overall debt. This will also provide some liquid access for future deals.
Private lenders are people with cash in the bank who aren’t necessarily looking to invest but looking for high returns on their investments. If you want to land a private lender you will need to demonstrate thorough due diligence and provide high returns. The reality is, if you can get through the research and paperwork, you are well on your way to establishing your future as a U.S. real estate investor.