Real estate investors need capital. There’s no way around it. Some of you may decide to go the traditional route and take out a mortgage or some type of loan to fund your real estate investment ventures. Others will need to apply a different tactic in order to enter into the real estate investing game.
For some people, raising money for real estate deals is the best way to get started in this industry. You may not know it now, but there are some advantages to raising money that you may not have ever thought of. We’ll share these advantages with you below, so keep reading to discover the truth.
Advantage #1: Presenting Exciting Deals to Interested Buyers
By raising money yourself as opposed to taking out a traditional loan, you can find and pitch interested buyers and recruit them into your real estate deals. This is a huge advantage because as long as you’ve found an excellent deal, you should have no trouble getting interested investors on board.
As you undoubtedly know, there are likely millions of investors trying to find hot deals. If you can present the right deal to the right person at the right time, they’ll gladly jump on board and enter into a partnership with you. But the deal has to be great otherwise you’ll have a tough time finding and securing the best investors.
So make sure your presentation is flawless. And even more important, make sure the deal is a no-brainer that will provide realistic returns to your money partners. If you can prove this to potential money partners, they’ll gladly enter into a partnership with you and provide their piece of the financing to secure the deal.
Advantage #2: Learn Quickly If a Money Partner Is Interested or Not
One of the worst things about securing a traditional mortgage is playing the waiting game. Mortgage companies make you jump through dozens of hoops to submit the proper paperwork to attempt to get a mortgage loan.
You could eventually end up waiting weeks or even months before you find out if the financing is going to come through. This is deadly because hot real estate deals disappear fast, so you must have your financing in place quickly. Waiting months for an answer will be devastating to your business.
On the other hand, presenting your deal to potential money partners means dealing directly with investors face-to-face. This provides a big advantage over doing business with traditional lenders. You can make your presentation to a potential money partner and they can provide an answer much quicker.
In many cases, your potential money partner may tell you whether or not they’d like to finance your deal right on the spot. But more than likely, they will need a couple of days to think about your proposal. But when you think about it, knowing if you’ll get financing within a few days is much better than waiting weeks or months to hear from a traditional lender.
Hopefully you’ve learned more about the advantages of raising money for deals today. We believe that raising money is the right way to go as a real estate investor. Attempting to obtain traditional financing is too slow and too uncertain and it can cost you amazing deals. Since no one wants that to happen, please take this advice to heart.