Did you know that in the great state of Michigan (where I live) a man legally owns his wife's hair?!
Or, did you know that, by law, everybody that lives in Vermont must take a bath at least once a week? (I think this may be a good one!)
In Atlanta Georgia, it is forbidden to dress a mannequin without first pulling down the window blinds. It is also illegal to tie a giraffe to a telephone pole or street lamp?
Allright...those little facts are going to help you if you are ever on the Jeopardy show with Alex Trebek or if you find yourself engulfed in a Trivial Pursuit death-match with your family at the next Thanksgiving dinner. But, how in the heck is this going to help you get private money to buy real estate?
I'm glad you asked!
Here's the skinny: these old laws are strange and arcane. They are probably not really that relevant to living in a modern society. But, there are some laws that have stood the test of time and they really make sense to keep around. For example, I really like the one about people not stealing.
When you take a look at the real estate investing world, you will see the same thing. No, not a bunch of laws for how to buy and sell property. Rather,you have investing strategies that come and go with the times and you have techniques and principles that work and make sense no matter what.
The reason I'm so fired up about private money is that I believe it is one of those very techniques and principles that lead to virtually unlimited profits and cash flow - no matter what. During an uptrending real estate market, you can use other people's money to edge out competition on better deals. In a market downturn, you'll have the cash horde available to steal bargains when other investors have to sit on their hands.
Right now, "getting private money" is in style. And for good reason. A person's credibility would really dry up if they got up on a soap-box and told you that seller-financing, no money down strategies work today like they did in the past. It's just not true. There's a lot of hype still going on out there that reports that banks are starting to loan again and that credit is easier to get.
I think it is easier to get - compared with 6 months ago. But, compared with 6 years ago...not a chance.
If you really want to build a bullet-proof business - then learning how to get and use private investor financing will give you the ultimate edge. That way, you won't have to worry about what happened in the latest Wall Street Drama or what the minutes were from the last Federal Reserve meeting.
A lot of people want to know where to start with getting private money. This is a fair question. Before you start on the funding warpath, you should first make the decision in your own mind that private money is going to be a part of your business and not a passing fad.
If you just want to poke at it with a stick, then you should take a step back. A private investor will be able to sense that you aren't fully committed and they will be less inclined to lend money to you. once you realize private money is a vital tool- sort of like having a black belt - you should begin without hesitation.
The single most important thing you can remember is this: there is no coronation ceremony where a bunch of wise old real estate investors give you a certificate and tell you that you've earned the right to get private money. Nobody is going to tell you that "you're ready." There's not formal training or certificate to be had.
Why is this the most important thing?
Because far too many real estate investors think that they don't have enough credibility, experience, etc. to get private money. This type of thinking is like cancer for your success.
I've helped real estate investors get private money for their very first deal. And, unfortunately, I've seen the flip side- with real estate investors having 25 years (and hundreds of deals) in experience who can't get over the mental hump of getting private funding.
You see, all you have to do is apply proven methods. And...take action. Don't wait for some magic moment where you think you'll finally be ready. That moment might never come! You just have to get out there.
As much as this real estate market changes, there are still time tested principles that work. Buy a property for less then it's value. Supply/Demand (called "location, location, location" by real estate agents), make sure your numbers work if things don't go 100% to plan.
Having private money behind you will put a very sharp sword in your hand that will work in up and down markets. It just doesn't lose usefulness over time.
Now, on the other hand..about that law in Kansas where you aren't allowed to catch fish with your bare hands....