#7 Investment Under $25,000 for 2007
Combining funds with other investors can significantly increase the scope of investment options. For example, a group of 10 investors with $25,000 each will have access to many more deals than one investor with $25,000.
This strategy also enables investors to be more conservative as they enter deals. Instead of buying a $200,000 duplex with $25,000 and running on slim or negative cash flow, the investor can buy in cash, or at a low loan-to-value, with other investors and limit the risk associated with leverage.
Investors should make sure they are very comfortable sharing a business relationship with their potential partners. It is crucial to get everything documented in writing, no matter who the partners are, whether friends, family, business associates, etc. Without written documentation, varying expectations and conflicting assumptions can and will be made. Partnerships with loved ones are particularly delicate because there is the ever-present possibility that relationships can be damaged by misunderstandings or conflicts in investment dealings.
Where to find investments:
Potential investment partners can be found through personal networking and local investment clubs. Potential deals can be found in a variety of places, depending on the type of investment the partners decide to pursue.
