How to Invest in Real Estate With Other Peoples’ Money (OPM)
Here are two main tips that I’ve got for you today…
1) Be very clear about both the RISK as well as the OPPORTUNITY when speaking to prospective investors
Make it clear that there is a very real chance of losing money, even if it seems like a SLAM DUNK. Nobody wants losses to happen, however it is a possibility.
2) Be willing to give up the majority of profits, especially if you are newer in the world of Real Estate Investing
Doing this helps you get your foot in the door and get started.
Consider starting at 90% (investor) / 10% (you) on your first deal. This will maximize your chance of getting started with those first few deals… which will give you both experience and a track record that will help build confidence in your ability to handle the critical job of actually managing rental properties.
In subsequent deals you can change the ratio; maybe the second deal will be 80-20, then 70-30… be willing to be generous.
The Game Has Changed Since 2007… Investors are Weary
After the massive real estate changes of 2007, investors are as weary as ever when it comes to investing in Real Estate, so being extensively generous like this will help to assuage their fears, and make investing with you attractive.