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Why You Shouldn't Use Your Own Money for Real Estate Investments

Updated: May 9, 2023

Investing in real estate can be a great way to build wealth and generate passive income, but it can also be a significant financial risk. In this video, real estate investor Pace Morby explains why he recommends not using your own money for real estate investments.



Section 1: The Risks of Using Your Own Money for Real Estate


In the video, Pace Morby starts by explaining the downside of using your own money for real estate investing. He highlights that using your own money may limit your ability to scale up your business and make larger deals. Moreover, you may run out of money and miss out on great opportunities. He suggests using private money to finance your deals.

  • Real estate investments can tie up a significant amount of your capital, which can limit your financial flexibility and leave you vulnerable to unexpected expenses.

  • Real estate investments can be unpredictable, with unexpected repairs, vacancies, and market fluctuations that can quickly erode your profits.

  • Using your own money for real estate investments can also limit your ability to diversify your portfolio and spread your risk across different asset classes.


Section 2: Alternative Financing Strategies for Real Estate Investments


Pace Morby then moves on to discuss the benefits of using private money. He notes that private money lenders can offer more favorable terms, including lower interest rates and longer repayment periods. Additionally, private money can help you build your reputation and credibility in the real estate industry.


Next, he explains how to find private money lenders. He suggests networking with people and building relationships with potential lenders. He recommends being transparent about your deals and presenting yourself as a trustworthy and reliable borrower.


  • One alternative financing strategy for real estate investments is using other people's money, such as borrowing from private lenders, crowdfunding platforms, or syndications.

  • Another option is leveraging other assets, such as stocks, to secure financing for real estate investments. This can help you maintain liquidity and diversify your portfolio.

  • Partnering with other investors can also help you pool resources and spread the risk of real estate investments.


Section 3: The Benefits of Not Using Your Own Money for Real Estate Investments


Pace Morby emphasizes the importance of building strong relationships with private money lenders. He suggests treating them as partners rather than just sources of financing. He advises creating win-win scenarios for private money lenders by offering attractive returns on their investment.


  • By using alternative financing strategies, you can limit your financial risk and maintain greater flexibility to adapt to changing market conditions.

  • Using other people's money or leveraging other assets can also allow you to scale your real estate investments more quickly, as you are not limited by the amount of capital you have on hand.

  • Finally, using alternative financing strategies can help you create more passive income, as you are not relying solely on your own resources to generate returns.


Conclusion:


Real estate investing can be a great way to build wealth and generate passive income, but it is important to carefully consider your financing options. By using alternative financing strategies, such as other people's money or leveraging other assets, you can limit your financial risk and create more flexibility to adapt to changing market conditions.


 


About the Author


Yo! I’m Pace Morby ✌🏽 Professional real estate investor, business entrepreneur, visionary, father and husband! I'm married to the most beautiful real estate agent and we have two children living in Phoenix, AZ. My goal every day is to do dope shit!!


I've done over 7000 renovations in the last 10 years and built 150+ new homes. My wholesale business does 150 wholesale deals a year, my fix and flip business does 50 flips per year, and my partner and I own $32 million in buy and holds through CREATIVE FINANCE! My YouTube is to show you that you can do this too and HOW to do it from someone who really does this business.


Subject to and seller finance are my bread and butter, and I'm on a mission to educate the masses that real estate and creative finance are for ANYONE and EVERYONE who wants financial freedom and generational wealth. DM me on Instagram and tell me what you need.


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