They say “It takes money to make money”, does it?
This is often an excuse used by those who like to overspend and a reason not to get started in real estate investing by those who don’t have it. It certainly seems a lot easier to make money if you have a lot already right?
Isn’t that why the rich keep getting richer?
It can seem easier to make money if you have a lot to throw around but this often creates laziness and an easier acceptance of lower returns. If the rich are getting richer it is because they know how to put money to work and often you won’t find them betting with a lot of their own capital on the line. In fact, many incredibly successful real estate investors who have made a ton of money choose to continue to use other people’s money for real estate investing instead of their own. Isn’t that smarter?
No money down real estate investing deals is still possible and is done every day. Sometimes they may take a little more work but the trade-off is clearly a huge ROI. Not to mention safety of your capital and savings, this is priceless.
This doesn’t necessarily mean scrounging around for seller financing or pulling funky tricks with double closings. It can be as simple as enlisting a group of private mortgage lenders.
Even if you have cash leverage will enable you to grow your real estate investing business and wealth much faster than you could without it. Cash may be king when no one else has it and when financing isn’t available but you can definitely make plenty of money without starting off with a lot.
However, it is extremely wise to build up a nice wad of working capital and reinvest in marketing.