In real estate investing, you need money to make money. And you need it right at your fingertips, ready to use. Being money ready is non-negotiable in this business.
But it doesn’t have to be your money. Better yet, it doesn’t have to cost you a single penny to access. Funding your fix and flips can be simple and stress-free.
You just need to know how to do it.
Introducing Your Money Bucket.
It’s the ultimate tool to make flips easier, faster, and more profitable. It represents the funds you can access instantly so you’re always prepared to seize opportunities or keep your projects moving ahead at full speed.
Why You Need Your Money Bucket
Having Your Money Bucket means you never need to wait on a lender’s approval or chase down financing. Because you’ll always be money ready.
When you’re money ready, you can:
- Secure great deals without hesitation.
- Keep your investments on track.
- Avoid lender draws holding up your project.
- Ensure contractors stay paid and on your job.
- Have materials available when needed (preorder).
- Cover unexpected overages without halting progress.
- Stage properties for fast sales.
- Jump on your next deal, while waiting for your current one to sell.
- Keep your business rolling, uninterrupted.
In other words, maximize profits on each property.
Types of Money to Fill Your Money Bucket
- Cash/Savings: The simplest option, these funds are immediately available in your bank account. This also can mean accessing investment and retirement accounts.
- Lines of Credit: Flexible and accessible, they work like credit cards but with more substantial limits and lower rates. Once set up, you won’t need permission or extra documentation to use them.
- Credit Cards: Perfect for covering materials, contractors, and day-to-day expenses. Preferably business cards and not personal cards.
- Real Other People’s Money (ROPM): Leverage investments from family, friends, or others seeking better returns. OPM is an excellent way to expand your resources without upfront costs. Learn more about ROPM!
- Partner: General public who has money and wants to invest in real estate without doing the work. A partner usually has both experience and money.
How Much Should Be in Your Money Bucket?
Your Money Bucket should hold 20%-40% of your total project costs, including the purchase price and rehab expenses.
These funds must be instantly available with no hoops to jump through. Immediate access ensures you’re ready to tackle any challenge or opportunity without delays—because delays kill deals.
Why Having This Bucket Saves You Money
Even if you don’t use these funds, simply having them gives you peace of mind and flexibility.
Without this safety net, you risk losing deals, stalling projects, and facing expensive delays.
BUT, believe me, if you are doing fix and flips you will need some available funds more often than not.
Where Your Money Bucket Works on a Flip
Your Money Bucket is crucial in covering:
- Percent of Purchase Price: Ensure you can close the deal.
- Percent of Rehab Costs: Keep contractors working and materials flowing.
- Escrow Funding Delays: Avoid waiting on lenders.
- Expected Overages: Handle surprises without stress.
- Closing Costs & Reserves: Be prepared for the unexpected.
- Payments & Carry Costs: Keep everything running smoothly.
- Other Expenses: Handle any curveballs thrown your way.
Multiple Sources = Maximum Flexibility
Real estate investing success hinges on flexibility. Having multiple sources of funds ensures you’re always prepared.
For example, you could cover materials with credit cards and pay contractors with a line of credit. This adaptability keeps your projects on track, no matter what.
The Bottom Line
Your Money Bucket isn’t just a backup plan. It’s the foundation of your fix and flipping success. With this bucket in place, you’re ready to:
- Act fast on great deals.
- Avoid costly delays.
- Keep your projects moving at lightning speed.
Remember, the key to success is preparation. By filling Your Money Bucket, you’ll unlock your potential as an unstoppable force in real estate investing. Don’t wait—start building Your Money Bucket today!
Need help? Let’s chat.