How to Invest in Real Estate for $10.42 - Engaged Investor Blog

How to Invest in Real Estate for $10.42

The other day,  this dude asks me how to invest in real estate by joint venturing with me.

So I show him a simple deal.  ALL my deals are simple.

$75K in, using the money from his line of credit.

Sounds like a lot of money for most people.

And it is.

But then again, most people aren’t sophisticated real estate investors. Like you and me.

We’re not better – we just know how to invest in real estate and LEVERAGE money, am I right?

Here’s what happened.

After I told him how to invest in real estate using a $75k line of credit, he pulled back.

You know the deal.

I talk a lot about these objections and how to handle it in my Joint Venture Formula system.

So I followed my own advice.

I said, “you know this isn’t YOUR money you’re investing right?”

He looked at me like I just flew in from Mars.

“Of course it is, he said, “it’s from my line of credit.”

“Exactly – the BANK is LOANING you money, so you can go MAKE even MORE money.  THAT’S how you invest in real estate smart”

He had a puzzled look.

So I made it very simple to understand how to invest in real estate:

“Listen, would you invest in a property for $10.42? I asked.

“Hell ya…who wouldn’t?”

“Well, that’s exactly what this investment is costing you.

Here’s how:

We buy a property for $300k.

20% down is $75k – that’s where you come in.

Now. You’ve BORROWED that money from the bank, right?”

“right” he agreed.

“Right now, the bank rate is low…so EVEN if you had an interest rate of 5% on that money, it would mean you’ll pay $312.50 per month to carry that loan.

We both know you’re not paying 5% on the money.

But let’s go with that just for shits and giggles.

If you divide 30 days into 312.50, that’s just $10.42 per DAY.

And I’m PRETTY DANG SURE you spend more than $10.42 on your morning coffee, breakfast sandwich, and a muffin.

So what you’re telling me is, you’d be willing to give up an investment that could solve your debt problems – because you don’t want to invest $10.42 per day???

You’d rather just keep investing in the breakfast sandwich, muffin, and coffee?

AND, on TOP of that, your of $10.42 per day investment is TAX deductible.

So, even though you’re spending that money up front, at the end of the day, you’re able to write it off your taxes.

What do you think now?”

See, when you help people understand how silly it is to worry about the money they are going into “debt” to buy a real estate investment like this is, you have a great chance of moving them closer to working with you.

Hope that little story helps ya!

If you like this, here’s another cool post that shows you the 3 Steps to Raise Capital for Real Estate Investment.

  • 8 months ago