Real estate investing creates a number of opportunities for the new investor, some requiring little or no cash to get started. Even if you’re an investor with some cash and you’re employing multiple strategies, you’re probably quite happy with your investment results. Many investors overlook one resource for investment capital. They also may not think about spreading the wealth around a bit.
New investors in particular may be hesitant to involve family and friends for fear that they will be perceived as coming hat-in-hand to ask for help. Of course, you can do that, and there’s nothing wrong with it. However, after you’ve learned the ropes and have a few profitable deals under your belt, you have gained expertise that your family and friends can see and evaluate. At that point, it’s more about sharing than it is about needing their money.
Perhaps a relative is invested in the stock market or bonds and complaining about the low income generated by their accounts. Maybe a friend is concerned about investing an inheritance in the stock market or just dumping it into a safe yet low yield savings account. They would love a better ROI, but they’re very risk-averse.
Once you’ve gained the skills and market knowledge to profit in your real estate market, you’re not getting help from your relatives and friends; instead you’re able to offer them help. Perhaps you can partner with family or friends in rental property investing. Or, maybe you can offer short term low risk transactional funding opportunities to them. You’re successfully wholesaling or employing fix-and-flip strategies, and instead of giving those higher fees and interest rates to a funding company, you can offer them to your circle and they’re covered by the value of the real estate.
It’s a really nice thing to do for your family and friends if you can help them to prosper with your skills and real estate market knowledge.
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