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How to avoid becoming cash poor in real estate through cash preservation.

Why it’s so important for business owners to remain as liquid as possible and how to maximize the velocity of money.

A lot of people don’t fully understand what it means to be “cash poor” until it's too late. Being cash poor is one of the worst feelings in the world because your bills don’t stop rolling in just because you run out of the cash to pay them. If you own real estate (rentals or if you’re funding your own rehabs), you still have repairs to make.

What happens is that new investor start dumping their own money into their deals believing this is how to invest in real estate. Before they know it, they’re out freaking out because they see that they have obligations on the horizon with no way to pay them.

Even if you hire a coach or mentor, they don’t talk about this enough. Most of us don’t come into this business with load of cash. That’s why we’re getting into this business, right?

In this video we talk about a simple mindset and strategy that will ensure that you are never have to go through this...

Borrow on your real estate deals. Use other people's money (OPM) to buy real estate. Do not tie up a bunch of your own cash to buy properties.

Terms matter. A lot of gurus will tell you that the cost of the money you borrow doesn’t matter, but they’re only giving you half the story. How much you pay for the money you borrow comes into play over time.

Here are the best sources for funding your deals from best to worst:

a. Private lending

b. Commercial lending

c. Hard money lending – this is your last resort

So what do you do with your cash?

Become the bank (hard money lending). Keep 12 months of reserves, lend the rest. Lending will generate additional cash flow.

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