Other ways to get financing ?

Question

Hey guys, I have been learning about real estate since high school and I am currently 21 years old. I have been saving for a while now and have about $32k to put down for my first property. The problem is that I worked a w-2 job for about a year and a half, I also refereed basketball and volleyball on the side. I quite my w-2 and became a financial advisor and am self employed. I started in January and haven't made hardly any money because I am still young and starting out and trying to learn the industry. So my problem is that I cant get approved for a loan. I thought about going thru a hard money lender? I would really appreciate any ideas or insight that you guys have for me, I plan on getting a single family home to rent out to start, thanks!

Scott Jensen · Answer

@Brandon De La Pena If you started a new business of any sort I would recommend you NOT focus on acquiring real estate. Focus on your new business. Once your new business is successful real estate can be a great place to put your excess cash.

Marcos Gonzalez · Answer

If you can find a cash flowing property can you do a DSCR loan. As long as the rent covers PITIA you can get financing. The rates are usually 2% higher than conventional financing. Best part is you wont need to show any income taxes just need a credit score, an appraisal, and a cash flowing property.

Account Closed · Answer

Hey Brandon:

What I'm about to say may not agree with some of the previous responders, and while I admire their advice and believe that they were all thoughtful suggestions, I don't agree. Here's why>>>

Whenever anyone asks me what advice would I give my younger self, or if I could go back and do something over what would it be:

I always say: Buying my first property. When I was 24 living in Philadelphia, a relative offered me an apartment building for $13,000. At the time I was making $57K a year as a Database Programmer and living with my Foster Mom rent free. The only bills I had was my car note, insurance and beeper bill. I turned it down because the advice I was given was: You are too young to buy a house. Fast forward, now I'm 50 and I own not 1 property. If I would have thought it out I could have bought the property with owner financing , lived in one apartment and rented out the two others.

Nowadays, you can buy a house with an FHA loan and down payment assistance, live in one room and rent out the others (house-hacking)

Or You can buy the house live in the basement and rent the entire house out as an AirBnB.

All I'm saying is, when people tell you that you are too young to do something, challenge that thought, see if you can come up with a solution. If an old man can figure out how to beat the lottery legally, a young man can figure out how to buy his first property and start a business too.

Go forth young man and good luck!

Ryan Deasy · Answer

@Brandon De La Pena

good for you on starting so young and yes, hard money is probably your best bet. i used hard money many times and it worked well. happy to share my experiences.

Caleb Bryant · Answer

There are sooooo many ways to acquire or control a property without using traditional lending, sub-to, lease option, private lending, joint venture, owner finance to name a few. Still think you're right to focus on your financial advisor business but you can be learning about any of these techniques in the mean time as well as getting strong traditional lender contacts.

Taylor Ratliff · Answer

It's definitely better to be safe here than sorry. You are doing a great job, just give it a bit more time. A year goes by so quickly! I would speak with a lender so that you have clarity on EXACTLY what you need to do to qualify for different types of lending! Good luck!

Brandon De La Pena · Answer

Thank you for the up front honesty, I have had a few people tell me this so I will definitely take this advice, thanks!

Brandon De La Pena · Answer

I will definitely take this advice, thanks you for not beating around the bush I appreciate it!

Brandon De La Pena · Answer

I've had a few people tell me this. I will probably take this advice and hold of on investing in RE until I have grown my business. Thanks!

Brandon De La Pena · Answer

Awesome, thank you!

Other ways to get financing ?

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