Tilted Forum Project Discussion Community - View Single Post - How would I Obtain Capital for Starting a Business

DDDDave · 05-16-2006, 02:13 PM

NoSoup,

You know, I'm in the biz. What you want to do has been done before. In every town, every day. I hate to make it sound so easy, but put an ad in the classifieds... 'Wanted...real estate investor to partner on real estate deals' Your phone will ring off the hook. As you get older you will realize how much money is out there. Everyone is looking for a way to make money. You have the skills and an angle. You will need to have your ducks in a row, and have a 30 second 'elevator speech' ready. You will need to be able to state exactly what you want......you will get calls from a lot of peolpe in the same boat as yourself. But it only takes one true investor for your deal to fly.

Talk to a real estate attorney friend. (I know you know a couple.) This should be your first task. The attorney will know how to structure the deals and probably knows the investor too. (It might be him.) They way for the investor to protect his investment is for the property to be in his name. IMHO, you will need to do the first couple of deals on a 'fixed fee' basis. "We will buy this house for $65,000, fix it up for $5,000 and sell it for $90,000". "Mr. Investor, I will do this whole deal for you and charge you $5,000. You just need to show up at the closing with the check for $65,000" The attorney will make sure that the funds get disbursed correctly, coming and going. Agreed, it is not the best deal or the deal you want, but you need a track record. If that deal goes according to plan, there will be plenty of others.

What scares me is when you say 'financing them will significantly decrease the profits' Word to the young....when an investor is investing hard money he is not looking for a 10% return, he wants to double his money. In our business, interest expense is the cost of doing business. I don't even do a deal unless I can make 50%. Agreed, I do 1 for every 50 that I look at but it saves me spending time and effort on a deal that will make me 5 grand. Every deal requires the same amount of work, so only do the ones that will make you real money. A RE investor does not want you chasing every deal in town just to make 15%. If you cannot afford to pay 10% interest on the money for 6 months and still make good money, pass on the deal.

Number one rule.....not location, location, location. DON'T FALL IN LOVE. If you fall in love you will do irrational things.

Good luck. Let me know.

05-16-2006, 02:13 PM	#6 (permalink)
DDDDave Addict Location: Sarasota	NoSoup, You know, I'm in the biz. What you want to do has been done before. In every town, every day. I hate to make it sound so easy, but put an ad in the classifieds... 'Wanted...real estate investor to partner on real estate deals' Your phone will ring off the hook. As you get older you will realize how much money is out there. Everyone is looking for a way to make money. You have the skills and an angle. You will need to have your ducks in a row, and have a 30 second 'elevator speech' ready. You will need to be able to state exactly what you want......you will get calls from a lot of peolpe in the same boat as yourself. But it only takes one true investor for your deal to fly. Talk to a real estate attorney friend. (I know you know a couple.) This should be your first task. The attorney will know how to structure the deals and probably knows the investor too. (It might be him.) They way for the investor to protect his investment is for the property to be in his name. IMHO, you will need to do the first couple of deals on a 'fixed fee' basis. "We will buy this house for $65,000, fix it up for $5,000 and sell it for $90,000". "Mr. Investor, I will do this whole deal for you and charge you $5,000. You just need to show up at the closing with the check for $65,000" The attorney will make sure that the funds get disbursed correctly, coming and going. Agreed, it is not the best deal or the deal you want, but you need a track record. If that deal goes according to plan, there will be plenty of others. What scares me is when you say 'financing them will significantly decrease the profits' Word to the young....when an investor is investing hard money he is not looking for a 10% return, he wants to double his money. In our business, interest expense is the cost of doing business. I don't even do a deal unless I can make 50%. Agreed, I do 1 for every 50 that I look at but it saves me spending time and effort on a deal that will make me 5 grand. Every deal requires the same amount of work, so only do the ones that will make you real money. A RE investor does not want you chasing every deal in town just to make 15%. If you cannot afford to pay 10% interest on the money for 6 months and still make good money, pass on the deal. Number one rule.....not location, location, location. DON'T FALL IN LOVE. If you fall in love you will do irrational things. Good luck. Let me know. __________________ I am just a simple man trying to make my way in the universe... "Go confidently in the direction of your dreams. Live the life you have imagined." - Thoreau "Nothing great was ever accomplished without enthusiasm" - Emerson