The Three Elements of Capital for Buying Real Estate – A Bucket or a Bladder?
| | Monday, March 29, 2004 @ 08:00 AM EST
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Contributed by: Gregg Fous
Gregg Fous Properties
Read more archived articles about Credit and Finance
I am taking a continuing education course for my broker’s license and during a discussion of what it takes to invest in real estate the topic turned to raising capital. As you already know, I spend a great deal of my resources on my projects at Brixton, my deals for my Market America clients, operating my businesses, and spending time with my family. Some times I have so much going on at one time, I think my head is going to explode.
My brother Bill has a theory. He jokingly calls it the full bucket theory. He sometimes feels like his brain is like afull bucket of water. If something more
goes in, something has to splash out. I prefer to think of my brain like a bladder. It expands and contracts with the amount of knowledge I pack into it. But like a bladder, I feel the pressure.
I thought it would be helpful for you and perhaps therapeutic for me to define the capital (read = “resources”) you need and how you might relieve some of this pressure you may be feeling. There certainly is more than one way to raise capital and I submit to you that there is more than one kind of “capital”.
There are actually three categories of resources or “capital” available to you: Financial, Time, and Ingenuity. You have a limited amount of each, but for each category you can “outsource” and help relieve some of the pressure on you. If you are heavy in one category – you can get by with less in another category – or you can go out and RAISE SOME CAPITAL……………….
Financial “I don’t have enough money, how I can I buy real estate?” I get a form of this question very often. There are as many ways to finance real estate as there are deals out there. Without time and ingenuity, however, all you would need to do is have money. Most of us use OPM (other peoples money) in some form or another (banks mostly). There are many ways to get “in the game” in real estate and I talk about many of them in my newsletters. I know of three ways to alleviate the financial burdens – increase your income, increase your assets, or decrease your needs. Real Estate can be the cause or the solution. I suggest you make it the solution with a proper financial plan for asset or income growth. Talk to me if you need some financing ideas.
Time We all have the same amount of this precious commodity. It‘s how we use it that is different. Use your time wisely to immerse yourself in your task. You can free up time by using outside resources wisely. I believe the key is to spend YOUR valuable time setting and defining your objectives – then share them with those that you can delegate to – like your real estate broker, your financial advisor, or your assistant. Stop, plan your time, and allocate it well – and then delegate.
Ingenuity Some of you might not think this “resource” is much different from time. I disagree. When I spend brain power solving or planning or deciphering – I have less available for other projects. I may be able to allocate time and money by outsourcing, but I have a problem with the brain power part of it. This is because there are only a few key people I can rely on. My wife Gail and my partner Don are constants, and then there are the occasional experts like accountants and doctors that I can turn to for specific problem solving. I suggest you get a few trusted advisors on your “team” that can share the brain drain for you.
I would like to help you in all three of your capital needs – as they relate to real estate. Please consider Market America and our team a resource for raising your capital – be it financial, time, or brain power.
Please take some time to visit our website. (www.investinwaterfront.com) The elevations and plans for Island Pines are now on the site and we should release prices very soon. The Forum has some wonderful Q and A sections, and we have new releases on the home page every week. WCI will release two new towers in about 45 – 50 days. If the last release was any indication –these towers will go immediately. Tatiana will have info on the site on Monday.
In the meantime - try to make sure this information doesn't splash out of your bucket- errr I mean squirt out of your bladder.
Gregg
Note:
As always – if you have questions or comments – please check out my user profile.
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