How To Raise Money For Investing In Real Estate?

Do you see a great opportunity in real estate investment, but are short on cash? Apart from traditional savings and loan method, there are more ways to make to source funds for investment in property. 

Here are a few sources that you can tap into if you have a great idea to sell and have good marketing capabilities: 

Pension funds: If you are short on savings and came across a property that is all set to become a real estate goldmine in a few years? Then do not hesitate to invest retirement money. Make sure of the timeline of investment, and if it is shorter at around five to six years, make a dent into your pension fund by taking a loan. If all works out well, you might end up making enough to retire early. Pension funds are the least tapped of sources as they are viewed as a fail-safe fund. However, if there is a good opportunity you can use half of it and treat it as a loan which you should replenish later. 

Friends and family: Your idea is as good as you can convince your family members. All of us have one uncle or aunt who is rich enough and has liquid cash. There are also enough people in the family who are looking for good opportunities to invest money into. They can be a good source of funds which can come with least interest. There is always a trust factor that they see with a family member who is willing make their money make money. 

Joint ventures: If your cash pool is very low, get an investing partner. You should put in at least 20% of the amount in order to be able make a call. Tell your partner that you have done all the research and are willing to do the groundwork required for the investment like paper work, registration and other time-consuming processes. That might help you get a number of people willing to become partners. 

Real estate pooling: Before it became a breeding ground for scams, real estate pooling was prevalent among people who are either from the same community or office or those who share a good rapport. They would all come together to build either group homes or apartments. If you have good contacts with people with similar ambitions, you can come together and buy properties at a scale that you might not have been able to imagine, individually. This mode, however, requires a lot more paperwork and vigilance to ensure that the members do not go awry during and after the investment.

Crowd funding: The growth of internet has helped us make many friends. Crowd sourcing or funding is a tool to make investors of those online friends. The method has become famous in the last few years and the Securities and Exchange Board of India (SEBI) is looking to regulate this form of investment. If you have the next big investment idea, there is a global crowd willing to invest. 

(The writer has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities)