Three Ways To Invest Without Your Own Money
While home values are starting to rise, they are not flying off the market. The good deals you’ve been hearing about for years are still out there, and are waiting for your investment! Many investors have come back to the real estate market, purchasing properties that they believe will have a higher resell or rental value and quicker cash flow, in the next few years. Interests rates are still at an all time low, making it easy to profit from your new investment property.
Banks are still creating an unbalance between loans and their lenders, making it a challenging task to obtain funding. Most consumers are not happy with their banking situation, and bankers are looking for any loophole to not qualify you for your investment loan. The money is there, but it is still hard to obtain. This has resulted in many investors looking to put down their own money on real estate. While it may initially sound like a good idea, here are few reasons why you shouldn’t invest your own cash:
- Other People’s Money: The most profitable and successful real restate investors never use their own money. They follow the old acroyn, OPM – Other People’s Money. By keeping your own capital safe, you can secure more cash flow without the stress. These OPM’s are fund seekers that are looking to quietly make a nice profit on your real estate investment, and don’t want to have to put in the physical labor required to maintain the investment. These OPM investors are everywhere, but it is safe to start your search within your own family, friends or business acquaintances.
- Value Of Money: If you have the option to not tie up your own money, then it is advised that you don’t. Another reason is due to the time value of money. This financial concept rides on the theory of what your current money will be worth at a future time, due to interest or inflation. Typically, it has shown that the dollar you put towards the investment today will be able to buy less in the future. By placing your own money into the investment, you’re basically loaning to yourself, with no interest.
- Value Of Time: It may start like real estate investment isn’t worth your money, but it is not a get-rich-quick scheme. The value of real estate is in the time and long-term investment plan. By building a relationship with a mortgage lender, you can capitalize on the incredibly low rates still existing today, and see a brighter future for your cash flow.
Overall, the benefits to holding onto your own money when investing in real estate are endless. The concept of using Other People’s Money is not only your best option, but can result in a mutual gain of profits for both you and your partner investor.