From: alexhormozi
It is a common misconception that significant capital is required to make substantial money [00:00:00]. This article outlines several creative strategies to achieve significant financial goals, including making a million dollars, often with little to no money down [00:00:10]. These concepts can be scaled for various financial targets, from hundreds to millions [00:00:14].
Strategies for Acquiring Value Without Upfront Capital
1. Acquiring Businesses for No Money Down
One highly creative approach is to get others to transfer their businesses to you without any upfront payment [00:05:15]. A notable example involves combining several small information businesses into a larger entity [00:05:20]. A friend successfully merged four such businesses, each doing approximately one million dollars in annual revenue, creating a single four-million-dollar top-line business with a million and a half dollars in profit, all without out-of-pocket expenses [00:05:23]. The arrangement involved paying the original owners their expected income from the business for the next two years [00:05:37]. This strategy resulted in owning an asset valued at millions, acquired at no immediate cost [00:05:43].
This method emphasizes providing value to the seller by taking over their operational burden, allowing them to monetize their existing asset without the ongoing effort [00:06:07].
2. Borrowing to Acquire an Asset (Client-Financed Acquisition)
This strategy fundamentally mirrors how real estate operates [00:01:09]. You borrow money to acquire an asset, and then a third party (e.g., tenants) pays off the debt [00:01:13]. A friend in real estate, initially flipping houses, discovered greater potential in larger transactions [00:01:21]. He purchased a 14-unit apartment building using someone else’s capital and sold it four months later for an additional 500,000 in a single transaction [00:01:29]. This realization led him to focus on more expensive commercial real estate, where flipping a 13 million could yield substantial profit without long-term holding [00:01:42]. He scaled this to flipping 30-40 properties annually with minimal staff [00:01:51].
3. Refinancing an Asset for More Than Its Purchase Price
This method involves finding an asset priced significantly below its market value and securing a loan for the difference, requiring no personal money down [00:01:57]. For example, if a 80,000, and the seller agrees to finance $10,000 of that over five years, a bank might finance 80% of the value. This creates an immediate equity gain or cash difference that can be leveraged [00:02:13]. This strategy can be applied to any scale, from a hundred thousand dollars to a hundred million [00:02:35].
4. Selling an Option or Contract for an Asset
This involves securing a contract (an option) to buy an asset at an agreed-upon price in the future [00:02:42]. The goal is that the asset’s value will increase beyond the agreed price by the time the option is exercised [00:02:55]. An example is offering to buy houses at 20% below market rate [00:03:09]. Eventually, a seller might agree, particularly if they’ve owned the property for a long time and its value has significantly appreciated (e.g., buying a house for 800,000) [00:03:15]. With an option period, you can then sell this contract to a real estate investor for a higher price (e.g., securing an option for 900,000), netting the difference without investing any personal capital [00:03:25].
5. Commission-Based Sales of High-Value Assets
While not directly an acquisition, selling high-value assets on commission is a path to substantial income without ownership or capital [00:03:41]. For example, selling a 3-4 million, on a single transaction [00:03:45]. Similarly, a realtor selling a 1 million, without ever owning the property [00:03:52].
6. Arbitrage
Arbitrage, a sophisticated financial strategy, involves capitalizing on price differences for the same asset in different markets [00:06:44]. For instance, if Bitcoin is priced at 19,100 in the US, one could buy in Japan and immediately sell in the US for a $100 profit [00:06:51]. This principle applies to physical products and even lending money between parties, where borrowing at 1% and lending at 6% yields a 5% difference [00:07:06]. Investment and company growth strategies often involve identifying and exploiting such discrepancies for fast business growth strategies.
These strategies demonstrate that generating significant income often hinges on providing disproportionate value or identifying market inefficiencies rather than solely relying on existing capital [00:06:01].