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Flip Houses Without Using Your Own Money

Although it is true that when you invest in real estate it is much better if you do have your own money, it is highly possible to use “other people’s money” (OPM) as your entire investment. What you need to do is find an investor who will lend you money. You will use this money to buy and refurbish the home. Then you pay that lender interest on that money.

There are actually several places you can look when you want to start doing this. One way you can do this is to take on a partner who is looking for a great investment of his own. He could be a business colleague, a friend, a relative or another prospective real estate investor. It may take a little ingenuity, but surely you can think of someone who will fit the bill. All you need is someone to finance your ideas while you do all of the real work on the home itself. Tell him you want to split any profits equally with him. Eventually you will locate a taker.

Another possible type of investor for you is known as a “hard money investor.” This person will typically lend you the money you need but charge an extremely high interest rate to you, sometimes adding points in addition to that. If you really think you have a good deal on your hands; even with the high interest rate, it will ultimately pay off for you. The best thing for you here would be to pay off the loan relatively quickly so that the dollar amount of the interest does not pile up.

Yet another possibility exists for you which might be your best option. That is to find a private lender. They are normal people; like you and I, who have more money than they know what to do with and want to invest it. They will not necessarily be looking for an investment; however if you approach them with your idea, they may well accept it. You do not have to worry about anything illegal taking place here, the money is totally legitimate. It usually comes from their mutual fund or 401(k) investment fund that keeps accumulating for them. These people often would like to find something useful to do with this money rather than just watch it sit in their bank. Again, all you need to do is ask them.

The best thing you can do when approaching somebody to invest in your idea is know what you are talking about. You want to answer all of their questions and assure them you are not planning some shady scheme to steal their money. This can be a great investment idea for both of you if you know what you are doing and play your cards right. Have fun!