“Real freedom begins with financial freedom,” Rich Dad, Poor Dad author Robert Kiyosaki wisely noted. In parts one, two, and three of Million Dollar Creative Financing Ideas we talked about Financial Freedom: the ability to sustain a certain standard of living without having to work. With as little as $5,000 to $10,000 per month most people could maintain their current standard of living without a job. This article is dedicated to helping you find the money to create that residual real estate income. You do NOT need a job to accumulate money. Unfortunately, however, most of America’s educational institutions train us to develop an employee mentality.

     But a growing number of Americans are tired of accepting the status quo, they’re tired of rush hour traffic, and they seek a way out of the rat race. They realize that a J.O.B. really means “just over broke.” They want to control their income. They’d rather toil twelve hours a day for themselves than work five for someone else. Instead of seeking employment, they’re finding ways to become wealthy without a job. If you’re like us, you prefer that freedom too. Overwhelmingly, real estate is the fastest, easiest, and most reliable investment vehicle of our time.

     Whereas many conventional investment options are volitile, real estate allows control over your investment. When arranged properly, real estate investments can even be guaranteed risk-free. Moreover, the variety of real estate investment methods can accommodate both active and passive investors. Best of all, when it comes to real estate, the old saying “You need money to make money” is absolutely false! Money is not essential for real estate transactions. In fact, I almost never put money down to purchase or control real estate.

    If you wish to invest without a lot of start-up capital, creative financing is the answer. In the past three articles we addressed creative financing methods such as life insurance policies, credit unions, credit cards, small loan companies, angel investors, commercial checking accounts, buy back options, joint ventures, etc. In this article we will talk about additional methods of finding money for real estate transactions using “Profit Centers.” A Profit Center is something that you do to create wealth that you do not do normally. Over the years, my family, my students, and I have experimented with dozens of creative ways to fund real estate transactions, a few of which are explained below: (For methods 1-18, read Million Dollar Creative Financing Ideas, parts I, II, & III)

Property Management

     Amidst the excitement of acquiring real estate, many investors fail to comprehend the responsibilities involved in real estate ownership. To name a few, landlords must pay attention to preventative and symptomatic maintenance, book-keeping, property registration, lead paint compliance, periodic inspections, etc. Consequently many landlords could use the help of a good property manager. With a computer, a little guidance from the property owner, and a few hours per month, most any organized person can earn six to ten percent of the landlord’s gross rental income! Finding clients is easy. Design a professional looking brochure outlining the benefits of your service and highlighting your credentials (if any.) Then, meet property owners by networking at rent court, attending a local real estate investment group meeting, calling “For Rent” ads, or sending out solicitation letters to absentee owners. Finding a client with as little as ten units could bring you an extra income of $800 per month. Not bad for a few hours work!

Educating

     Today more than ever, our society is based on information. People are continually enhancing their skills, they are going back to school, taking courses, exercise classes, studying martial arts, buying real estate investment material, etc. People may be willing to pay for your expertise too. What is your special skill, hobby, or obsession? Can you teach a foreign language, bartending, desktop publishing? Once you’ve identified your special skill, type a training curriculum and make a list of necessary training materials. Then, schedule and advertise a workshop in your home, hotel, or in a rented space. Consider giving a free initial class so that prospective students can see the benefit of your knowledge before paying your hourly or flat fee. To avoid unpleasantries, have your consultation agreement reviewed by an attorney and collect payment up-front by cash, money order, credit card or certified funds. With some success, you might even consider opening a website and hiring instructors to do the teaching for you!

Bird Dog

     Hunters often catch prey with help from a canine friend. They send their “bird dog” into the field to scare up ducks or to retreive them. In business, a bird dog is someone who produces leads for others. If you are short on start-up capital, consider referring some of your leads to other real estate investors for a fee or even better, for a percentage of profits. Start by creating a list of buyers by networking at local investment clubs, contacting owners out of the newspaper, or visiting the courthouse. Next, locate owners of property who are motivated to sell, then contact your buyers. If you choose to contact me, you can earn a referral fee of 10-20% of net profits!

Referral Fees

     Why stop with investors? A variation on the bird dog idea is to collect referral fees from other service providers. With an active real estate business you will constantly meet individuals in need of real estate services. Jot down their contact information and call a reputable real estate service provider. Offer the first referral for free, and ask if they would be willing to pay a fee for future referrals of buying customers. Consider speaking with insurance salesmen, window companies, general contractors, real estate agents, title companies, etc. Note that certain business arrangements involving referral fees are prohibited under the Real Estate Settlement Procedures Act (RESPA). Your attorney can help you make sure that you comply with the law.

Odd Jobs / Handyman

     Many years ago, my Dad purchased a house with not a single window pane intact. Shocked by the repair quote from the glass company, he purchased glass, glazing, and the tools to replace the windows himself. He cut his fingers a few times, but he replaced the glass himself and learned a skill in the process. Carrying the leftover material to his car, he was surprised by the number of cracked and broken window panes in the neighborhood that went unnoticed. Going door to door he solicited his “glass replacing service” for a few hours and made enough money to pay for my materials and to keep a small profit. Can you paint, fix doors, do a little plumbing or drywall? If you have a pick-up truck, offer to cut overgrown hedges and haul debris, or find any other need and fill it. Run ads, call landlords, turn off the TV, forget some of your bad habits, and use some of your free time wisely. There are hundreds of “profit centers” available to you. With a little brainstorming, some creative thinking, and some effort, you should be able to achieve the funds to begin investing in real estate. For more ideas about profit centers, I recommend Conrad Levinson’s 555 Ways to Earn Money without a Job. Also, look for more Million Dollar Creative Financing Ideas in part five of this series!