Edward Day - Raising Capital for Real Estate: How to Create Passive Income from Home and Captivate Investors, Provide Credibility and Finance Projects- A Beginners Guide

Raising Capital for Real Estate:

A 3-Hour Crash Course for Beginners

How to Create Passive Income from Home and Captivate Investors, Provide Credibility and Finance Projects

Edward Day

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Introduction

N inety percent of all millionaires become so through owning real estate. -by Andrew Carnegie

American real estate has been one of the best assets a person could ever own. Over the past 100 years, the real estate market has returned an amount in excess of what the stock market has ( Capital Raised for Real Estate Investment Pre-Covid-19 Hits Record High , 2020). This is despite the fact that the real estate market had a complete meltdown in 2008 when it crashed to multi-decade lows.

This scared away many people from investing in real estate, but the fact remains that real estate investing is one of the most lucrative ways for new investors to increase their net worth by large amounts. This is because there is always going to be a demand for housing.

People will always need places to live and to shop etc. Both residential and commercial real estate opportunities abound in America, and until the Covd-19 lockdown took place, real estate financing was at an all-time high.

There are many ways in which deals get financed. Traditional methods involve going to a lender and hoping and praying that you qualify for a mortgage. This is the route that many investors attempt, and they find their applications rejected more often than not. The fact is that traditional lenders such as banks are extremely risk averse.

As a result, they end up lending money to people who dont really need it in the first place. Is it any wonder that these institutions then need to turn to fancy derivatives to boost their returns? Most banks dont understand how real estate works and, as a result, the real estate entrepreneur isnt best served by them.

This is where private financing enters the picture. While such investors are willing to absorb more risk, sourcing such opportunities might be difficult for the average person. After all, it isnt as if you can hang a sign in your window and expect people to come flocking to you with bags full of cash.

If youve spotted a great potential investment, but don't have the money to turn it into a reality, it can be frustrating for you to watch someone else take advantage of it. So how does one go about raising money for real estate? How should you present yourself to investors, and more importantly, what sorts of deals stand a good chance of attracting money to them?

If youre looking for the answers to these questions, youve come to the right place! In this book, you're going to learn how fundraising for real estate investment works. More importantly, youre going to learn what the market looks like right now, and which inefficiencies in it you can take advantage of.

Risk and Opportunity

D espite the manner in which I just described traditional lenders, theres no denying that securing a loan from these institutions is the best option for many people. After all, the interest rates are the lowest and youre dealing with a large institution that is going to make sure you receive your money.

This highlights an important aspect of real estate, fund sourcing. While there are many options for you to raise money, not all of them might be suited for you. Some will work better, thanks to the low levels of risk present in them, while some might be horribly unsuited for the investment opportunity because of the terms being unsuited.

The task for the real estate investor to master is to fully understand the ins and outs of these methods, and that begins with fully understanding the risks of each financing option. A hard money lender might be the most willing to give you money, but they arent the best choice over the long term.