I’ve written extensively on about raising money from others to get started with investing in apartment buildings.
And others have written about creative financing to get into deals without any of your own money.
But then there’s the sticky issue of what to do about the deposit money and due diligence costs. No one really talks about these very real costs that require very real cash.
What do you do if you don’t have this kind of cash? Should you put your dreams of early retirement on hold?
Not having enough cash for the deposit and due diligence is definitely a challenge, but it does not need to be a showstopper. The key is to leverage your investors in ways that go beyond them just being an investor. If someone is willing to invest with you, there is already a certain amount of trust between you and that person. Otherwise they wouldn’t consider investing in one of your deals in the first place!
Your investors can help you in more ways than just putting money into an escrow account and getting equity in return. They can help you with the cash you might need BEFORE closing, too.
Here are some tips for getting your investors to help you with both the security deposit and/or the due diligence costs.