As a species we humans started as hunter/gatherers, then becoming civilized we moved to being agrarian, then in the Industrial Revolution populations moved to cities and became workers, performing manual labor. Now, with technology transforming the economy and work we are in the Information Age. Many pundits have tried to label what the next “Age” is going to be; the Wisdom Age, the Communication Age, and so on. None of that really captures it for me.
What I see coming next is the Entrepreneurial Age. The Age of taking nothing for granted, where you are entitled to precisely nothing. With populations and need growing on a Hockey Stick trend line, if you don’t know how to solve problems and create value, in the coming years you will be “dead”. Almost literally.
You can see the beginnings of it now; people in mid life whose jobs have been eliminated by technology, looking for another job where they can employ their existing skills, that unfortunately don’t exist. The hard truth is, many job seekers have to go back to school and learn new skills so they can be employable for jobs that are available today.
OK. Wow. A bit of a rant brewing here.
Actually, I didn’t mean to go out on such a bender on this topic. What I want to say is, whatever “Age” we are moving into next, today we are most decidedly in the Information Age. If you work as an employee, there is a roughly 85% chance that you are a Knowledge Worker; meaning the tool of the trade you practise is the specialized knowledge you have in a certain area, and you are employed based on your ability to use or implement that knowledge somehow.
Knowledge is evolving daily, and the way it is used and applied is also changing right along with it. So all of this is to say, if your kids want a chance at prosperity in the coming years, be that as an employee, or a business owner, they need an education. A college education maybe, though not necessarily, nevertheless an education that gives them the chance to be relevant in the workforce of today and tomorrow.
The situation that will require proof of funds is working with a lender to get a mortgage approved. Any lender who is providing acquisition financing will want to see the money sitting in a bank account with your or your partner’s company name on it as part of their underwriting.
So at some point before closing, whether it is early or later in the process, you will have to be able to provide proof of funds in order for the deal to close. If you personally don’t have the funds there are a number of ways to raise them.
One is with a money partner. There is nothing new or revolutionary about this. You have a deal in the early stages of being tied up, most likely you have an LOI submitted and the Seller is showing interest. You create a deal summary and then contact every person you know who would be a possible candidate for partnering with you. For every one that says they are not interested, you say to them you understand, but do they know of anyone who would be interest. In about half the cases you will get another name, and so you call them, and continue your search.
Another way to find partners, and private lenders for that matter, is to advertise the property for sale. Advertise it heavily in as many places as possible to get as many calls as possible. With each caller you give them the deal summary and follow up after one or two days.
In the best case you will have a buyer for the property you can wholesale to. If they say they are not interested, you ask them what was it about the deal that made them not interested; they will tell you. If the reason they give is related to the property, note what it is and let them know you will be in touch with another property that fits their criteria. If the reason they give is related to price, ask them if they would like to partner on the deal instead, with them being the money partner and you doing all the work. Depending on who you are talking to, this will be interesting to them. A younger go-getting investor will say “no”, because he/she doesn’t need you, an older more veteran investor will probably be interested, because having their capital and track record make money for them, instead of their personal time and effort, is more what they are looking for.