So, you’ve looked over the Filthy Riches concept and you’re ready to get going on your first property purchase. I know what you’re thinking: if I had the money at my disposal, I wouldn’t want to be looking into making money! The thing is, though, raising the funding for your first property deal is not only easy, it’s one of the easiest parts of the whole Filthy Riches program.
Don’t forget, we’re not talking about coming up with $50,000 to $100,000 to buy a property. With the purchasing formula we outline for you in this program, you’re only looking at having to come up with roughly $5,000 to purchase a low end home. There are many places you can go to find the funding you need and I’m going to show you the best and easiest ways.
The difference between this type of property purchase as opposed to a more traditional one is that the funding streams will come from different areas. Your goal is to buy a home, hold the note and start collecting payments. That’s where the real wealth starts building.
Consider your own resources first. One of the first things you should do as an investor is to make a complete list of your assets and talents. This list can include anything from something you could sell, trade or a service you could perform. For example, if you’re a carpenter – or even just a general weekend warrior – you might want to think about trading labor and/or material on one property to raise your cash flow. The most important thing when you’re looking at your personal resources is that you never know when or what people might need or be willing to trade. Be ready to negotiate when the time comes.
If you own your car free and clear, consider using the option of contacting a title loan company. A title loan company will loan you the funding you need, which you will easily recover in one or two real estate deals, plus have the extra funding to be able to keep making other real estate transactions.
Take a look around your home. Chances are, you’ll find some items that you really don’t mean that much to you that you can sell on eBay. This is actually, one of the fastest ways to start raising the money you need for the $5,000 initial investment for your first property. Many people who start in the Filthy Riches program just find things of value that they don’t need anymore. You’d be amazed at what you can sell on eBay… and these items are right under your nose! Some people work only a few hours a week by finding items either in their homes or by going to yard sales and then selling them on eBay for a much higher profit. Believe it or not, this can net more than a full time job with a few hours commitment per week.
Another option to find the funding for your first deal is to just use your credit card. Many people have $5,000 on a credit card that they can use; if not, chances are, you know someone that does who would be able to loan you the money.
Which leads me to the next idea. After you’ve looked at your own personal assets and skills, consider reaching out to other people. OPM (Other People’s Money) may be your best bet for raising the initial money for your first deal. Don’t forget, with the Filthy Riches approach, you only need to raise $5,000 to make your first real estate transaction, not the $50,000 to $100,000 that you would need for a traditional home loan. Offer them half the profit on your first deal. That’s a pretty substantial return on their investment.
When considering using the OPM option, you can look for either a cash partner or a credit partner. A cash partner is someone who has the cash in hand to lend you for your initial deal. It can be your parent, a cousin, friend, a co-worker, or even your doctor or dentist.
A credit partner is someone who may not have the cash but has good enough credit that they can get an unsecured loan or an advance on their credit card right away. Credit partners are generally easier to find than a cash partner.
Whichever route you go, simply explain to them how quickly you can turn their investment around and pay them back quickly. There are so many ways you could structure the terms with a cash or a credit partner. You could split it 50/50 or offer them the first 10-20% of profits. You could also offer a minimum of 10% return on the money they lent plus a percentage of the profits in the end.
Another option is to use a peer-to-peer lending site. Sites such as prosper.com serve as the meeting ground for people who have the cash and people who require a loan. Simply post a listing of how much money you want to borrow and what purpose it will be used for. Take the opportunity to explain why you would be such a good credit risk. Potential lenders using the site can bid on loaning you the money you need. So, if you posted a listing for $5,000, you might find 100 people bidding to loan you $50 apiece. To repay the loans, you simply make payments to prosper.com who then distributes the money to your lenders.
If you wanted to, you could literally complete two or three deals a month; getting the property under contract, finding the person you are going to sell it to and then selling the note to that property. From here, you would only need that $5,000 to complete two or three deals a month and will only have to do that for a month or two before you can do it all on your own, anytime, when you feel like it… without ever having to borrow any more money. It’s that easy!