Using Other Peoples Money....

[Jae Cunningham]

I believe I understand the concept of "using others peoples money" in terms of how it would benefit your lender, but I'm just at a lost as to how it all works and I would love if someone would clarify it for me....

This is what It looks like in my head:

1. You find a lucrative yet safe deal.

2. You present deal to lenders.

3. You negotiate what the lender will receive after the deal is complete (repayment/interest).

4. You use lenders money to purchase the deal.

Am I missing a step?

I've been watching a design show on HGTV called "FLIP OR FLOP" and on that show the couple buys home with their brother in laws money, and fixes them up and at the end of it they get a percentage of the overall sale.

Now I know through the "magic of Hollywood" it looks easy but something about it just doesn't sit well with me....Like how does one just TRUST another person with that amount of money?

I fancy myself to be like a low key real estate deal finder. Just from moving around a lot in my childhood and then again with the military, I've seen and been in a number of different markets. From California, to D.C., to international markets like Japan and now I've settled in Billings MT.

I would LOVE to take what I know about certain markets and bring them to the right ears, and then strike up a partnership moving forward I just have NO CLUE as to where to start?

Should I come up with the deal first? Or perhaps seek out like minded individuals and move forward from there?

I feel at times my ambition burns a hole through my overall understanding...and once the ship is on fire I end up abandoning ship.

[Joshua D.]

@Jae Cunningham

Using other people's money can look about 1000 different ways. You saw one way on TV. I think the big question for you is, what will be the most creative way for YOU to finance a deal? have you got Brandon's book yet? Creative REI. It will help answer some questions for you.

Here are some other forms of funding a deal

1. Credit cards (usual for the rehab) 

2. Owner finacing 

3. Crowd funding or peer to peer lending

4. Asking friends or family for money

5. Small local bank finacing 

6. Line of credit

There can be so many varying combinations of these as well.

Keep plugging away.  We will have a billings meetup in January, and hopefully that will help keep you motivated! Focus on finding a great deal.