Seeding Your Investment Fund

Is it possible to invest in real estate without any cash? You bet. Is it easier if you have some money for a down payment? Of course.

Coming up with even a few thousand dollars in cash may seem like an impossible goal, but you can do it—and you may be able to do it faster than you think. Look for ways you can save money and then set that money aside until you have enough cash to make your first investment.

The real key is seeding your real estate investment fund is not just to save money, but to actually deposit the money you’ve saved into your fund—even if it’s just a dollar or two at a time. Get an envelope, a jar, or a dish, and start putting money in it. Don’t touch it, don’t count it, just keep adding to it. Then once a month, take the cash to the bank and deposit it in a separate savings account that you have designated as your real estate investment fund.

Here are some tips for filling up that cash container quickly:

	Empty the change from your pockets or purse into your savings container before you go to bed every night. It will fill up faster than you think.
	When you leave home in the morning, don’t carry anything smaller than a $5 bill. As you spend money during the day, don’t spend anything smaller than a $5 bill. At the end of the day, put all those single dollar bills and coins into your savings container.
	If you go out for a meal, tip yourself as well as your server. Set aside the same amount that you leave as a tip and put it in your savings jar.
	When a bill is unexpectedly low—for example, when a utility bill is not as high as usual—put the difference in savings.
	If you smoke, stop—or at least cut back. And put the money you were spending on cigarettes and lighters into your savings container.
	Keep a jar on your washing machine and throw in a quarter every time you wash a load of clothes.
	If you’re trying to shed some weight, give yourself extra incentive: every time you forgo a snack or yummy dessert, put the cost of that treat in your savings container. The number on your scale will go down and your bank balance will go up.
	When you pay off a debt that’s been part of your budget for a long time, such as a car loan, keep making those payments to your real estate investment savings account.
	Eliminate unnecessary banking fees. Ask your bank for a free, no-frills checking account. Also ask for free check printing (some will offer this as part of a special package); if they can’t provide it, order your checks through a discount check printer. Then set the savings aside.
	When you get a raise at work, your tax return comes in, or you receive any other sort of financial windfall—no matter how small—have the funds directed to your real estate investment savings account. If you’re not used to having the money, you won’t miss it.

It won’t take long before you have enough cash to do your first real estate deal. When the profits from that start rolling in, they should go into your investment account to be used for more real estate. With a little discipline at the start, it won’t take long for you to have the net worth and cash flow you’ve always dreamed of.

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