One of the biggest concerns facing San Diego County real estate investors is finding more money to invest in property and working capital to grow their business. It is an essential part of business that not everyone knows how to obtain. Accordingly, why is it not only a poor use of time and energy, but even detrimental to achieving short term and ultimate goals?
Wanting more money to invest in San Diego real estate continues to be one of the chief excuses for those sitting on the sidelines or just idling, and often takes them further from their goals. This is primarily due to a large misconception of what the industry actually requires or excuse. Ironically, even those that get it often find it can do more harm than good. There is definitely a way to approach this situation, but not everyone knows how. So why wouldn’t Southern California real estate investors and investment firms need more money?
The pursuit of more money before taking the next step is often little more than a detour. More importantly, all of the money in the world won’t make a difference without access to deals and customers. These are the two things than San Diego real estate companies really need. Find the deals and gain the customers and the money won’t be an issue.
This is a lot easier than most think. San Diego property wholesalers and turnkey real estate investment firms have deals they are serving up on a platter for those who just ask. At the same time, real estate tech startups and the focus of the largest online platforms has really come full circle. Instead of trying to reach the whole world, they have come back to honing in on hyper-local data and local marketing. The web is great. Online marketing is powerful and reaching a global audience is within everyone’s reach. But right now all it takes for many to get deals is to go outside and engage the local community. If you have no deals, customers or budget at all – this is a great place to start.
Again, the money trap often takes new and veteran real estate investors alike further from their goals. The pursuit of it can become a major distraction. Prepping sales pitches for private lenders and spending weeks or months hunting down and pitching venture capital firms costs a lot of time and money. This doesn’t mean it is bad by any means, but carefully consider whether it is really putting you on the fast track to your goals or not.
In contrast, simply getting out there, doing deals and building a successful business can automatically and passively create a magnet for all types of money. With this in mind, it is important to recognize the pitfalls of taking outside funding. It can sometimes mean giving up control, or developing loyalty burdens which do not place the business’ interests first. It also tends to lead to a poor ROI and often trading quality for buying the business.
Of course, there are very good reasons to take the money too. Leverage, especially in this phase of the San Diego housing cycle, can be incredibly beneficial and powerful. It can be critical for growth and getting to the next level. Everyone talks about ‘viral content,’ but in reality the secret behind a lot of ‘viral’ or popular content is the hundreds, thousands and millions spent on making it go viral and get visibility.
Raising money is actually the easy part, at least when it comes to just making real estate deals you’ve found happen. Five easy sources for more cash include transactional and hard money lenders, private money lenders, crowdfunding, partnering up, selling financing and other creative no money down structures.
