For The Love of Money

Money, money, money
Money, money, money
Some people got to have it
Some people really need it

We all know the song from the hit reality TV show The Apprentice performed by The O'Jays. It’s probably my favorite show to watch. Not because of The Donald though he is a great Entrepreneur, but because the show is packed with entrepreneurial ideas. If you want to really learn about Donald Trump and his great entrepreneural mind read the books that were written about him. Especially those written by George H. Ross, Trump's close friend and attorney.

Money. We all need it. That’s why we work so hard for the majority of our adult lives.

We’ve all heard that you can’t make money without money. Sure, it’s easier to make big money, faster, if we have money to start with, but does it have to be our money? What about using Other People’s Money or OPM? Let’s say we had $50,000 cash, would it be better to buy a property with that cash or put the cash in the bank and use it as collateral and borrow money from the bank? Answer: Borrowing from the bank. This ensures that you will have needed cash for emergencies, deposits, etc. and the best part is that using the banks money reduces your risk.

Disclaimer: I am not a financial advisor or a CPA. Always seek the services of a competent, professional before borrowing money to invest with. Do not borrow more money that you can pay the monthly payments on in the event your property sits vacant for a period of time. That hurts.

There are many forms of OPM. Just to list a few:

• Traditional mortgage in your own name
• Borrowing against a CD or Savings account
• Home Equity Line of Credit, HELOC
• A commercial Line of Credit
• Hard Money
• Self Directed IRA
  

We haven't even covered the many forms of Creative Financing. Each has it’s own pros and cons and the details of the deal will determine which choice you should choose. Personally I like the commercial Line of Credit or buying property in your self-directed Roth IRA. I use Equity Trust Company, www.trustetc.com.

Whatever form of funding that you choose, always remember that investing is a business and you need professional in every aspect of asking for the money. Have a professional looking financial package to give to the lender. The perception that you know what you are doing goes along way when asking to borrow money.

Get a plan.

Go make offers.