Today’s question is one that I get all the time. It’s “how do I raise capital for real estate?” I got a gentleman here and he says, “I’ve got a couple rental properties. I own a home, I have a job. How do I get more money to buy more property?” This is the biggest question most of my students come to me with. They come in wanting to raise capital. I’m going to underline that in red. Raise capital. In truth, that’s what they want. They think they want to raise capital, but what they really need to know how to do is they have to learn how to negotiate.
Negotiate and find deals, because the truth is, the money always comes to a good deal. If you can get out there and tie up a good deal, the money always comes. What most people think is that they need to go out and raise capital before they get a deal. It simply doesn’t work like that. The name of the game is how can we go out there, find great deals, tie them up, and then go raise money. I wrote a book called Money People Deal, and real estate and business works like this. Here’s the deal, it’s the house. We’ll just say it’s a house or property. Here’s the team, here’s our people, down here’s our money. There’s these three parts. Most people think “I just need money to do real estate”, that’s wrong.
What is true, what is an actual fact is you need to go get a deal tied up. A property at forty to sixty cents on the dollar. If you can get a property at forty to sixty cents on the dollar tied up, and if you can get the team arranged in advance, and if you have these two things, the money comes every time. I’ve never had a single student not be able to get the money for their deal, and I’ve never had a deal myself that I’ve never been able to get the money for because I follow the process. I always get the deal tied up. I get the team tied up. I bring it all together in a nice little package, and I present it to an investor who’s looking to get into my deal and make eight to twelve percent annually.
That’s exactly how we raise money, but it comes down to being able to find a great deal, a below market value deal, and it comes down to your ability to assemble a team and put those things together. I hope that answers your question. It’s not money you need, it is your knowledge of doing this process. Tying up properties under value, assembling teams, and presenting that to investors.
I’m Stefan Aarnio, like, share, and leave a comment below, and don’t forget to respect the grind. If you have a question about investing in real estate, please post it in the comments below.