Thread: Investing without using your own money?

Starting a business without your own money is the most difficult things you will ever do.Time will come that demands are excruciating, the multi-tasking requirements are extraordinary, and the financial needs are endless.

The issue first and foremost is that investors will not believe that you are serious. It's not so much having enough money to cover equity in case something goes wrong (which is certainly a big issue, especially for banks). Other investors just want to make sure that you have "skin in the game" - that is, if it's such a good idea then you should have your own money in it. This will show that you believe in your own idea and that if things don't work out you have something to lose. Until that happens, your friend will be out of luck.

Investing without your money is advisable, only, in my opinion, when you have built a reserve, just in case you have to pay back your investor, the property doesn't sell and other unexpected issues. Hard money lenders and JV partnerships are great tools, but for very safe investments, where you already have an exit strategy in place.

Originally Posted by stubbs

Quick question. What's your thoughts on investing using someone else's money? I have a friend who is always talking about "finding investors" or going to "hard money lenders" but he doesn't seem to ever have any collateral. He usually just has a business plan and a strategy as to making things happen. Is this feasible in the "real" real estate investing world?

Investing without using your own money is perfectly feasible. With 7 years in the business, I always fund my deals using third party money. Private money is the BEST MONEY!! With the right proposal you can customize terms and payment options to meet the specific needs of the property you're working on.

Private money doesn't have to be Hard Money, or some large investment company... It can be a close friend, or family member with liquid capital

A strategy that is currently working well for me is finding investors whom have lost money in their IRAs and 401ks. Most don't realize this (and of course your investment broker will deny it) but you can purchase Real Estate in your retirement accounts!! The accounts must first be "self-directed" and this offers the additional benefit of protecting profits from capital gains tax.

For more on this download my free ebook below.

You know it can be very risky to do investment using someone's as it's not your money and you can lose the money.

It depends on what kind of person you are on the inside. If you use the other person's money with the utmost care then it may result in helping you, but who knows? I still suggest having a good amount of money as a payout plan just in case.

Very difficult this suggestion is very smart but now days people understand every thing. It is too difficult to uses others capital for investing purposes.

hi,
Well thats Difficult... but if some one is capable in using others money for his or her own business than he will be capable of making profit from almost everything...

Business, building construction and marriage can't get success without having money. To start up, you should have at least some amount in your pocket. After that if your repoo is well and people believe on you, you can take outside money on interest.......