Ross Hamilton - The Inside Guide to Funding Real Estate Investments: How to Get the Money You Need for the Property You Want

Thank you for downloading this
AMACOM eBook.

Sign up for our newsletter, AMACOM BookAlert , and
receive special offers, access to free samples, and
info on the latest new releases from AMACOM,
the book publishing division of
American Management Association.

To sign up, visit our website: www.amacombooks.org

To learn more about the American Management
Association visit: www.amanet.org

The copyright information for this title may be found at the end of this eBook file.

I would like to take a moment to tell you a quick story about a broke, confused, injured person who couldnt even afford to buy a book. That person is me.

Well over a decade ago, I was a promising BMX rider. I spent nearly every waking moment at the skate park perfecting my stunts. I spent my days training with Dave Mirra and Ryan Nyquist (The Michael Jordans of the BMX industry) Then one day I suffered a career-ending injury. I had to come to the realization I was not going to be an X Games gold medalist and I had to craft a new plan.

I couldnt work while I was recovering so my small savings was dwindling very fast. I went to Barnes and Noble and stumbled across a book about real estate investing in the finance section. I couldnt afford to buy the $19 book, so every day I would go to the bookstore and pick up where I left off the previous day.

I read one statistic that motivated me and I will never forget it. More than 80 percent of millionaires are made through real estate. My perception of the entire world changed. I never checked the validity of that statistic, but it made sense that if I wanted to create real wealth, I needed to play the odds and get into real estate. Since then real estate has made me a millionaire many times over. But it all started when I picked up that first book. To find myself in your hands now is an honor and as a washed up broken BMX rider, I never imagined this moment.

I hope this is that book for you. That book that gives you a new perspective on life and what it can be. I hope its that book that motivates you to take serious action. Why did I decide to write a book on the finance side of real estate investing? Ive found most people believe they cant be a real estate investor because they dont have any money. Nothing can be further from the truth and this book will put that in focus for you.

I would like to dedicate this book to the people whove had the biggest influence in helping me reach financial heights that not too long ago seemed so far away.

First, to Napoleon Hill, the author of Think and Grow Rich. Although Mr. Hill and I never met personally, I have studied him extensively and feel like I know him well. His lifes work has been the fuel that keeps me moving with a positive mental attitude through lifes curve balls. The principles of successes discovered through Mr. Hills work gave me a solid foundation to build my fortune on and it continues to inspire me today.

Second, I would like to dedicate this book to Doug Lebda, the founder and CEO of Lending Tree. His selflessness in sharing his life-changing wisdom has massively influenced my life, success, and abundance.

I also want to dedicate this book to all the men and women throughout the years who have spent time sharing their wisdom, connections, and resources with me. This includes the founders and fellow entrepreneurs Ive met through Tek Mountain, the members of my Mastermind team, and most important the ConnectedInvestors.com team. A special thanks to a few team members: Bill Brinkley for helping me build an empire and Penny Myers for helping me make this book a reality.

This dedication is my way of recognizing all the people who have made such a big difference in my life. I am hoping that through this book I can serve you in the same way so many people have served me. This book is designed to give you a foundation to build your empire on and provide you with the wisdom, connections, and resources to help you reach your goals. No matter how big or lofty your goals may seem, in todays fast-moving, hyper-connected world, you are just a few moves away from life-changing success.

ROSS HAMILTON

Founder and CEO of ConnectedInvestors.com

People get involved in real estate investing for a variety of reasons. For most, the motivator is financial gain whether it be through short- or long-term strategies, tax advantages, or any number of other underlying reasons.

There are a lot of different ways to make money in real estate investmentits the investors personal choice which investment vehicle to choose. Will it be residential properties, commercial properties, or something like land banking? Its also a personal choice when it comes to investment strategy. Will it be fixing and flipping, renting homes or commercial property, or perhaps building new homes or commercial properties?

Regardless of the vehicle, the investor, or the strategy, there exists a set of common problems inherent in every real estate deal. Perhaps surprisingly, all real estate transactions follow a similar pattern. The common problems all investors face follow a pattern that goes something like this:

Find It. Not every property is a great choice for executing an investment strategy. Finding the really great deals, especially if you are a fix and flip investor, requires tenacity and resourcefulness. The same holds true for cash flow properties that are held for the mid- and long-term horizons. Not every house or every commercial property has the making of a great addition to a rental portfolio. Discovering the properties is the first step; the next step is the due diligence. Is the property truly profitable, and what warts does it come with?

Figure It. Once a potential investment property is discovered, the truth lies in the numbers and thorough due diligence. What problems need fixing? Are there title or other legal issues? Once your due diligence uncovers potential problems, the next question becomes can it make money as a fix and flip? You must have good information, accurate numbers, and the right formulas to figure that out. Is a property positioned to be a cash cow, providing monthly income and long-term benefits when held as a rental property? Again, due diligence and running the numbers are the key to sound decision making. Trip up here and theres potential for short- and long-term losses. Once a winner is uncovered, the next most common issue that investors face is funding the property and/or project.

Fund It. After due diligence is completed, the numbers are in, and formulas figured, its time to determine the right kind of funding strategy for the property to meet the end goal. There are a variety of types of funding available for completely different purposes. Once the funding is in place, then you get to put the property to work as a fix and flip project, or perhaps a rental, or a development strategy.

Fix It. Rarely does an investment property change hands without some need for renovations or repositioning of some sort. Properties that are acquired at a great deal typically have more potential that needs to be realized. Usually the more warts a property has, the better the deal. For the fix and flip investor, this is where the money is made. But heres where theres an inherent problem. Most lenders dont want to make loans on rundown properties in need of repairs or rental properties that arent performing. This book is designed to help you overcome the Fund It problem when theres a need to Fix It.