No Money To Invest in Assets, Look beyond your personal budget.
You will have to exchange something for the Asset, even a promissory note!
You have been perusing on the budget or lack of it for too long. You should be chasing the deal not the budget!
The deal is more important than the budget.
You see you may be setting your eye on a deal based on what you earn or don’t earn, following the crowd 2.5 or 3 times your earnings. You may have given up on your searches for a property to invest in because you have no money!
Your purchases will be smaller and limited, you’ll be pinching pennies here and there on renovations to improve the properties etc…
Change your prospective and see an Asset greater than your means!! yes that’s right there is no real limit to the deal.
You must look for an opportunity with the potential to give you a return more than what is the norm.
You get money from other people to fund the deal.
This is what I learnt from Grant Cardone.
Who has the money is what you should be seeking, People are out there with the money. Use this to fund your deal.
‘OPMs’ (Other People’s Money)
There is no shortage of money out there!
What’s the deal? Get Units / Apartments. How to buy 84 units? That’s right aim high and make it!
Real estate made simple:
Chase the Deal don’t chase the budget.
Try not to buy less that 16 Units and get a manager, let them also rent a unit from you and give him a salary, he’ll be full time and there to manage 15 of those properties.
Pay the manager the cost of his rent and a salary so that he can focus his attention on the 15 Units.
1000 for each Unit that’s 16,000.
Pay the Manager up to 5% of this, that’s 800. This shows that the deal of 15 Units is still too small. To make it worthwhile for the Manager you need a bigger Deal, more Units/Assets.
How to Make The Deal, no Money down.
Aim high go for say 84 Units costing 1.5 million, it may need renovations add 500,000 on to the Deal.
The Deal therefore is 2 million.
You need to raise 1 million on your first deal. ‘Say Who’s got My Money?’
It is Occupied by 83%.
Gross revenue on the Deal at 83% occupancy is 9% cap rate. (Total income from rent received by occupancy)
2 million will return 18,000 per year (if this was a cash payment.)
Learn How To manage your ‘No Money To Invest In Assets’
- How do you Structure the Deal?
- How do you get people’s attention?
- How do you get that money down?
- How do you manage the Deal?
Love the Deal. Do you believe the Deal is a great opportunity?
Putting money down on a deal costing 1.5 million could bring you up to 16% per year depending on its location.
You’ll need 500,000 to put down on this Deal.
Note the number of the occupancy it was only 83%, so you know something needs to be done to get the occupancy up to 90% and above.
So to bring this place up to quality standards spend around 5,000 on each Unit.
- You need to ‘Build your Story’ to sell to your investors.
You need 500,000 to fix it and 500,000 for the loan and the Bank is there for the 1 million.
Structure: Rent 450/mth … This profile needs to be changed to up the quality of the Units.
450/mth , rent 75% occupancy = 333,750 per month.
For the year times 12 = 405,000
Spending 40% on expenses totalling 162,000
Balance of 243,000 income, minus the Interest Payment on the Debt of 1000,000 is 60,000.
Leaves you with a balance of 183,000 income in the first year! and that is without raising the rent.
Therefore on your total investment of 1000,000 that includes the 500,000 down payment for the loan of 1, 000, 000 and 500,000 for the renovations invested. Would give you a whopping 18.3% on your Investment in your first year.
Look and the potential renting capabilities on offer here when you spend around 5,000 on each Unit.
- Laminate floors
- New Kitchen Units
- Appliances : cookers, fridges etc…
Think of and chase the deal, need to work on the 14 vacant Units, fix these all up.
Raise the rents from 450 to 600 a month, renting the 75 Units. Now that is a new total income of 45,000 per month. Over a year that’s 540,000.
Less the expenses of 270,000 (this would include a manager’s salary).
Over four years your would have paid off your 1 million Down Payment!
Your return on the investment is now 27%, just by raising the rental income by 150/mth.
Think big, go big and get the great deals!
2) How do you get people’s attention?
Tell your investors, who have like 20,000 to 100,000 each and ask them,
How much are you willing to pay out from 27%? Bearing in mind the first year your income was at 18.3% and now in the second year you will have made 27%?
You choose what you want to pay each investor 8%, 10% 12% from your 18.3%…
Let me offer you 15% on your money in year 1.
Obtain all the possible positives as to to why they should go with the Deal. Ensure to get the prospective of a woman to gage her feelings about the property.
3. How do you get that money down?
Go to your family members, friends who may be interested in your Deal. Listen they are probably only earning .25% on their money in the bank right now! You have something worth going for.
Go over the numbers, what were the trailing numbers?
Worst case scenario, what is the return, where I can still make money, break even on the property.
You need to be on point and on board fully with this proposition. Gain their trust and commitment. Be supercharged with excitement, know your figures.
4. There are 2 ways to do the deal:
B) You control: Be the decision maker,
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