Post entry number 3 How to raise money for our real estate investments in the US You can invest in real estate…

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How to raise money for our real estate investments in the US

You can invest in real estate even if you do not have money - it's all about the ability to raise money from other sources. Of course the more you raise the higher the risk level of the deal accordingly.

Investment in real estate is usually considered a solid investment, which can be realized and the money returned home within a short period of several months, so if need be and we will need the money back we can soon sell the property.

The purchase of the first real estate property is recommended to make as much as possible through equity rather than by taking too large a loan. To help you raise money, 4 has focused on common ways of raising funds for real estate investments.

Invited to read and implement:

The first option is buying a property through equity, this is actually the recommended way to purchase the first property. If you have savings money, an education fund, inheritance money or just liquid money that is just waiting to turn into a smart financial investment, this is a great opportunity to jump into the water.

The second option is taking a loan from the bank

For those who have already purchased the first property or those who do not have enough equity it is a great option.
Of course, if your financial situation allows it, you can definitely consider taking a loan from the bank. Especially if you belong to a population that is entitled to good benefits and benefits such as bank employees, civil servants, the Hever Club and more.
When I take out a loan I prefer a long term loan to reduce my monthly repayments and generate a bigger cash flow for myself even if it means a larger principal repayments over the years.

If you can take a mortgage on a property in this country the most recommended way then we will look for regular bank loans. The problem with regular loans that are usually given up to 5 years, there are banks that allow loans up to 10 years and therefore have to carry out a small survey before taking the loan. Bank Yahav has recently offered 100,000 to 10 for years at prime + 1 interest rate, to anyone who transfers his / her account to them.

Here we will pause for a moment:

Suppose you have only NIS 150,000 at the moment and your goal is to purchase an investment property. If you continue to save it will take you many more years before you can start investing in real estate and in the meantime prices will continue to rise, so to start my recommendation is to take a loan of 100,000 NIS. Which will allow you to reach the amount of 250,000 NIS which is currently around 66,000 $. A nice amount that can definitely fit a first property.

The monthly refund in our case will be 1,012 ₪ per month (with an average interest of 4%).

A property worth 66,000 $ with an average yield of 8.5% generates $ 5,610 per year which is 21,120 ₪. This means monthly income of 1,760 ₪. After the loan repayment we will stick with a balance of 750 ₪ per month.

In real estate, you should always be prepared for real estate and in our case a refund of 1,012 NIS per month is not such a terrible thing to deal with in case the property is not rented or there is another malfunction, consider that there will be months when you will not receive income from the property.

But - after 10 years we will finish with the loan and be left with a clean property with no debts.
In addition to the income from renting the property, let us assume that there was an increase in the value of 3% only per year, our asset is now worth $ 88,000. Additional space of $ 22,000.

The third option is raising capital through partners
This is a recommended way to increase your real estate holdings. Recruiting other people and helping them to purchase property.

Even if you have a small amount of up to NIS 100,000 for a start, you can add additional investors to the deal and purchase the property in partnership. It could be a close person like a family member or a good friend, or a stranger who wants to increase his income through investing in real estate. The profit from the transaction will be divided in direct proportion to each person's share in the property. Whereas you who found the deal will be able to enter in a smaller amount but at the same percentages as the other partners.

The fourth option is intended to be developed between you and OPM Other people's money.

OPM
Is a transaction made with money other than yours. It is possible that you know people with money, but those who are not willing to enter the process of buying real estate in the US with all that entails - locating a property, conducting a tender, dealing with the management company, etc., do not have the time to deal with this investment and therefore They would prefer someone to manage their investments.

In this case, you can take control of the entrepreneur's standard, while the money for the deal will come from investors. The profit will, of course, be divided according to your agreement with the investors, and you will also benefit from it by spreading part of it to you.

A little tip for the road
To get more people into your venture, it's very important to show successes in transactions, you do not need many of them, success in one or two deals and finding the right people to work with will be enough.

But your first deal is the most important and if you do it right, it can be your chance to create a change in life and a turning point you've always dreamed of.