Investing in Real Estate with NO CAPITAL

The biggest myth in real estate investing is that you need to have large quantities of capital laying around to get started.You don’t. You just need to have value and knowledge and these are two things that anyone can acquire.All it takes is diligence & consistency learning the business and educating yourself.

Let me explain further.Take Robert Kraft (the owner of the New England Patriots) for example.Robert Kraft is an extremely wealthy business man.He built his business empire in the 80’s and 90’s in the packaging industry.He was a huge NFL/Patriots fan for years and decided in 1994 he wanted to buy the team.He knew he wanted to own a sports team, he had a lot of capital to invest, but he had no idea what it took to build a football team and organization.He needed partners that were knowledgeable and brought value to him to help him build a successful franchise.Once he found the right partners to guide his investment, that’s when the franchise became successful.

Real estate is no different.There are many wealthy professionals IE Doctors, Lawyers and Entrepreneurs who have capital and that want to get into real estate but they have no idea where to start or how to invest intelligently.That’s where you can bring value to real estate investing.You can be the other half of the equation that it takes to invest in real estate.They bring the capital and you bring the knowledge.

If you want be valuable you better learn this business inside and out but here are a few examples how you can make yourself valuable in real estate deals.

Know your market inside and out:One of my mentors once told me “you need to know your market so well that you know what the city’s high school mascot is”.Once you have identified an MSA as a buyer’s market based on projected job/population growth, (amongst other factors) that’s when you need to really dive in learn every inch of that market.You need to know every little detail about the market’s infrastructure, path of progress, major employers, airports, as well as local economic leaders and future plans.Then you need to take it a step even further and learn your sub markets and neighborhoods so you can really understand where you do and don’t want to invest based upon your strategy and business model.If you are looking for a starting point on how to attack market research, check out our free market research guide at www.snacap.com.

Know your properties:If your acquisition strategy/criteria is B-class properties with small value adds then you need to know everything about these properties in your market.You have to know what units are trading for and why, cap rates, GRM’s, lot sizes, parking layouts, amenities and construction types.If someone asks you how much of increase in rent you can expect if you upgrade countertops to granite on a certain street in your market you need to be able to give them a dollar figure right off the top of your head.You want your investors to know there isn’t anyone else they can go to that can tell them more about a given property than you.

Know your competition:Who is your competition?What are they buying?What do the properties around your property have that you don’t?What do you better than your competition?If the answer is nothing than your investors are going to want to partner with them and not you.

Know your local team members:One of the biggest advantages you can provide to your investment partners is your knowledge and relationships with the local market’s key team members.Generating relationships with local banks may give you access to better financing options than your competition.Employing the best property managers may allow you to create more cash flow on a property.Having access to pocket listings from local brokers who you’ve networked with will give you access to better deals than your competition.Building relationships with your local Town Hall and Chamber of Commerce can give you huge advantages on everything from taking advantage of tax credits to learning about future properties that may become available to the public.Go to the Town Hall and meet with the local brokers/PM’s.These relationships are invaluable.For more on the advantages of working with local Town Halls please visit www.snacap.com.

Deal flow:I mentioned deal flow above briefly but this one deserves its bullet point.If you aren’t bringing capital to the table than you better be bringing deals to the table.It’s simple, if you don’t a steady deal flow stream and access to great deals then you’re dead in the water.You need to have multiple outlets bringing you deals at all times.Some ways to ensure you have great deal flow are advertisements, direct mail campaigns, broker relationships and driving for dollars to name a few.If you can find great deals you can bring great value to your investors.

The above factors are just some of the things you need to master to make yourself valuable to an investment team.Educating yourself on these things gives you the ability to identify deals, buy smart, mitigate your risk, protect your investors’ money and give them great returns.And that’s what will get you into real estate deals with no capital!

For more on investing in multi-family please visit www.snacap.com