OPM - The Art of Leveraging

Equity lender, hard money lender, private investor or what ever term one uses can be a great source of funds to do real estate transactions and the question of how to find them comes up often!

There are numerous ways to do this, and no two investors are exactly alike, so it's important to be innovative and customize your proposal to the specific "hot buttons" for each funding source.

One of the greatest advantages of real estate investing is the power of leveraging other people's money.

When a property appreciates, it will appreciate on the value not on the original investment. Therefore, if you 'leverage' the property with "OPM". You can make an investment even more valuable by having the property rented out. The monthly mortgage payment is being paid by the renter and someone else is paying for your equity growth in the property.

"Money is a terrible master but an excellent servant." - P.T. Barnum

The best source of cash for your real estate business is other people's money.

Perhaps one of the greatest "secrets" of the richest people in the world is summed up in those three words: Other People's Money - OPM for short. The majority of most successful people launched their fortunes using OPM.

Your goal is to not use your own cash. The most successful real estate investor tends to use OPM (Other People's Money). Keep this in mind as you start to invest. Hold out for the limited money down or no money down deal rather than tying up a ton of money in one property. Leverage, terms and long loans can be great friends. Keep these principals in mind:

*Leverage is simply controlling a lot of real estate with little or none of your own money. The more the better. *You should attempt to get the maximum loan to funding possible with each property. *The best loans have fixed interest rates and are assumable without qualifying. *Keep your equity as low as possible so you can keep more cash available for investing.

You can find "OPM" by writing to various lenders asking them if they would be interested in your real estate loan. By calling lenders in your area who might be interested in lending on your real estate proposal. By visiting in person lenders whom you think would be willing to help you. By looking on the Internet for real estate lenders who might work with you on the deals you have. By reading the Real Estate Section of your local large-city Sunday newspaper, looking for ads run by lenders in your area.

Find properties that has been sold in the past few months by searching the public records at the county recorder's office. Find property that sold to real estate investors by banks, credit unions, HUD, VA, FNMA, or any other major source and if the buyer is not an individual but say a corporation or partnership you have most likely bagged an investor.

The deeds should give the mailing address of the new buyer. Send them out a letter and tell them about your ability to locate real estate or better yet give them a call if listed.

Any one who has money could be a source of funds for your real estate purchases such as Doctors. Another great source is checking your recorders office again looking for individuals who holds mortgages on property. This has provided me a great source for hard money loans.

Retirement plans are a great source of real estate investment funds. Many people don't even know they can use their retirement plans funds to invest in real estate, mortgages and trust deeds. Many, once they stash it away, forget they even have money in a retirement account.

Many investors think that money (or lack of money) is what stops them from closing a deal. This is not true it is a myth that holds some investors back. Understand that money is NEVER an issue - IF the deal is right, the money will come. Simply think creatively, go to the source of funds and simply ask for money. The worst that can happen is you get a "NO". Each no only places you closer to a "YES".

To your success,
John Michael

About the Author: John Michael is an active Real Estate Investor - Author - Speaker - REI CoachVisit my Real Estate Investing Site at: http://jmichaelrei.com FREE REI Club Site at: http://stealth.thecreativeinvestor.com

MORE RESOURCES:

Hypo Real Estate Gets EU20 Billion Guarantee From Rescue Fund - Bloomberg

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=Tct=us/0i-0fd=Rurl=http://washingtontimes.com/news/2008/nov/21/lawyer-shortage-exposes-papua-new-guinea-to-suits/cid=1272970285ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNGOPPZqfBZI5u0nLlFpObf8a-6djAimg src=http://news.google.com/news?imgefp=sFePmluJNTwJimgurl=media.washingtontimes.com/media/img/photos/2008/11/20/AUTO_001_r329x151.JPG%3Fe315d4515574cec417b1845392ba687dd98c17ce width=80 height=37 alt= border=1brfont size=-2Washington Times/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/0-0fd=Rurl=http://www.bloomberg.com/apps/news%3Fpid%3D20601100%26sid%3Da_tWZcQXw0Pw%26refer%3Dgermanycid=1272970285ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNF7eGW1Zj2fV440DaoUCPZRI0TzDwHypo bReal Estate/b Gets EU20 Billion Guarantee From Rescue Fund/abrfont size=-1font color=#6f6f6fBloombergnbsp;-/font nobr16 hours ago/nobr/fontbrfont size=-121 (Bloomberg) -- Hypo bReal Estate/b Holding AG, the German property lender bailed out by the German government and financial institutions last month, b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/0-1fd=Rurl=http://www.google.com/hostednews/ap/article/ALeqM5iUnm1V9WJblKt9BR2u9troModrrwD94JFGBG0cid=1272970285ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNFdi9glb_JKcDV8eZRdn-_r5jcBwwHypo bReal Estate/b to receive euro20 billion loan/a font size=-1 color=#6f6f6fnobrThe Associated Press/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/0-2fd=Rurl=http://www.guardian.co.uk/business/feedarticle/8057611cid=1272970285ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNFx5S1y5wxjYV3bxOFytgqOm3TBsA1-Hypo Real gets 20 bln euros in govt guarantees/a font size=-1 color=#6f6f6fnobrguardian.co.uk/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/0-3fd=Rurl=http://www.ad-hoc-news.de/DGAP-Adhoc-DEPFA-Deutsche-Pfandbriefbank-AG-SoFFin--/de/Unternehmensnachrichten/19883103cid=1272970285ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNEFvBg9tM-1rffJXlaJcYw_W-8nNwDGAP-Adhoc: DEPFA Deutsche Pfandbriefbank AG: SoFFin grants EUR 20 b.../b/a font size=-1 color=#6f6f6fnobrAd-Hoc-News (Pressemitteilung)/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1272970285hl=ennobrall 115 news articles/nobr/a/font/div/font/td/tr/table

Target rejects Pershing#39;s proposals on real estate structure - MarketWatch

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/1-0fd=Rurl=http://www.marketwatch.com/news/story/target-rejects-pershings-proposals-real/story.aspx%3Fguid%3D%257B677B96B0-0937-41A1-8F0F-2A51CB077AD5%257D%26dist%3Dmsr_3cid=1273025777ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNFlv-tEF6B3tO_DaPPr-RegiVYP-gTarget rejects Pershing#39;s proposals on breal estate/b structure/abrfont size=-1font color=#6f6f6fMarketWatchnbsp;-/font nobr10 hours ago/nobr/fontbrfont size=-1Ackman had proposed that Target spin off the land it owns into a breal estate/b investment trust in a bid to boost the company#39;s value. b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/1-1fd=Rurl=http://online.wsj.com/article/SB122731689706849897.html%3Fmod%3Dgooglenews_wsjcid=1273025777ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNGg-IIFW3S-LOQoNoJ3Zi-GsMXh-ATarget Corp. Won#39;t Pursue Pershing bReal-Estate/b Plans/a font size=-1 color=#6f6f6fnobrWall Street Journal/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/1-2fd=Rurl=http://www.reuters.com/article/ousiv/idUSTRE4AK7XV20081121cid=1273025777ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNEm4L4yxZMDyBsDBHOsIFryAbDBHQTarget rejects Pershing#39;s breal estate/b proposal/a font size=-1 color=#6f6f6fnobrReuters/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/1-3fd=Rurl=http://www.bizjournals.com/twincities/stories/2008/11/17/daily51.htmlcid=1273025777ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNEYgWt3nu0Mznj_Ls3uhOKJfX8EDgTarget rejects Pershing#39;s breal estate/b proposal/a font size=-1 color=#6f6f6fnobrBizjournals.com/nobr/font/fontbrfont size=-1 class=pa href=http://news.google.com/news/url?sa=Tct=us/1-4fd=Rurl=http://newsticker.welt.de/index.php%3Fchannel%3Dfin%26module%3Dsmarthouse%26id%3D814291cid=1273025777ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNH4u6k_2jIFLMRD9OaTDOuDlIvlFgnobrWELT ONLINE/nobr/anbsp;- a href=http://news.google.com/news/url?sa=Tct=us/1-5fd=Rurl=http://uk.reuters.com/article/consumerproducts-SP/idUKN2149409720081121cid=1273025777ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNEMjbsVTuoRTDZj4kaUetgYPT1JVAnobrReuters UK/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1273025777hl=ennobrall 414 news articles/nobr/a/font/div/font/td/tr/table

NAR, REAL ESTATE CHANNEL Create Online News Partnership - MarketWatch

Web sites offer real estate agent rankings - The Associated Press

Real-estate investment firm fights to stay afloat - Arizona Republic

Pure Industrial Real Estate Trust announces November distribution - FOXBusiness

Citigroup says commercial real estate bigger issue now for banks - Reuters

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=Tct=us/6i-0fd=Rurl=http://www.reuters.com/article/topNews/idUSTRE4AJ45G20081120cid=1273013942ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNExF4BBdHa5BnXRvPRsFIjqJb-SEAimg src=http://news.google.com/news?imgefp=a4_5Az-9orAJimgurl=www.reuters.com/resources/r/%3Fm%3D02%26d%3D20081120%26t%3D2%26i%3D6894209%26w%3D192%26r%3D2008-11-20T221527Z_01_BTRE4AJ182400_RTROPTP_0_AIRBUS-ALWALEED width=80 height=58 alt= border=1brfont size=-2Reuters/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/6-0fd=Rurl=http://www.reuters.com/article/innovationNewsFinancialServicesAndRealEstate/idUSTRE4AK6KA20081121cid=1273013942ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNHN7zOtI2LebkJkF5nnR5mQ-6bXhQCitigroup says commercial breal estate/b bigger issue now for banks/abrfont size=-1font color=#6f6f6fReutersnbsp;-/font nobr13 hours ago/nobr/fontbrfont size=-1(Reuters) - Commercial breal estate/b is becoming a bigger issue for US banks after the Treasury decided that funds under the Troubled Asset Relief Program b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/6-1fd=Rurl=http://www.nytimes.com/2008/11/23/business/23gret.htmlcid=1273013942ei=ytInSbHhK4zK8ATh2L0Ousg=AFQjCNFHisS-7iK7M9KyT117dxcCYuwJGwThat Money Isn’t Leaving the Vault/a font size=-1 color=#6f6f6fnobrNew York Times/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1273013942hl=ennobrall 36 news articles/nobr/a/font/div/font/td/tr/table

Real estate recovery not seen until 2011 - Seattle Post Intelligencer

Real estate group backs sick leave law challenge - Bizjournals.com

Real estate trophies on hold - Bizjournals.com

Real-Estate - Google News

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