Starting a career in real estate can be incredibly expensive and can vary from state to state. Make sure you can pay for your startup costs (pre-licensing class, exams, licensing, association fees, etc) and six months of expenses before diving right in.
Here are eight ways to make sure you don’t go broke while starting your career in commercial real estate.
- Keep Your Day Job
Instead of quitting your 9-5, consider working part-time, or making real estate your part-time gig until you’re on your feet.
- Use Your Savings
While it might take some time to save enough money to get started in your real estate journey, at the very least, you won’t have any debt. That’s a very huge plus.
- Liquidate Your Valuable Assets
If you have jewelry, real estate, antiques or investments (not retirement) that you are willing and able to liquidate, doing so could definitely help you.
- Borrow From Yourself
You can use a line of credit to get started by borrowing money out of your home’s available equity (Home Equity Line of Credit—HELOC). Or you can use credit cards.
- Borrow from Friends & Family
Although this might come interest free and with a flexible payment play, it can also ruin your personal relationships with your family and friends. Be careful, transparent and upfront about your ability to pay the money back and when you can’t.
- Get a Business Loan
If you have good credit, a solid business plan and/or collateral, this can be a really good option even if you need a co-signer.
- Business Line of Credit
This is a very popular option because it provides flexible money that’s always available for future needs. You only pay back and pay interest on what you borrow and as you repay it back, the line of credit replenishes itself.
- Partner Financing
You can work with a complimentary business who benefits from your business (i.e. a mortgage broker). He provides funding for your business and he offers you access to his services, expertise and/or their network.