Investing with no money down

Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes

Very excited to start investing in rehab's and rental properties. I have been analyzing 20 properties a day minimum. Problem is, no money. Solution, need a partner/investor. Question is, what comes first? the deal or the investor? What would you recommend my first step should be?

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Jaron WallingPro Member

Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes

@Sam Dorgalli Echoing what others have stated; it's EXTREMELY hard to start with no money. Let's not sugar coat that fact. Anything is possible but I'd rather focus my effort (time) on the path of least resistance. That means buying distressed with skin in the game (down payment, rehab funds, network of solid contractors, partnership split, etc.), adding value, and building a track record. Create a deal with your own money. I haven't meet any successful investors who skipped those steps. With a property or two under your belt money will find you for future deals. That's been my experience.

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Joe HomsBusiness Member
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
3y
@Sam Dorgalli the deal comes first. NOT off the MLS, unless its your listing. Learn how to wholesale to find a good deal. Forget about rentals in California, unless you do AirBnb. Learn how to flip properties. Go to some local meetups to find investors.
Good Investing...
[email protected]949-625-4533
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Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Joe Homs I have been browsing the MLS and working on connecting with wholesalers and investor friendly agents as well as seeking destressed properties whenever I'm heading somewhere. I am focusing on flips ATM. At the same time, I recently started attending a bigger pocket meetup in my neighborhood and I'm working on building a team. Thanks for the input.
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Brett Deas
CO · Member since 2022 · 590 posts · 428 votes
3y
Deals come first, I find all of mine on the MLS. Until you have a proven track record people need to see the deal, they wont just give you money to find one. When it comes to finding deals on the MLS you need to be creative, don't just look at other properties that investors have listed, dive deep into zoning and regulations. Maybe you could make more if you rent by the room, Maybe you can build an ADU and rent that out as well for extra income. Be willing to get creative and also know you might not be making much if anything for a while. Until you have money of your own be willing to work for cheap to build that equity and get a proven track record.
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Joe HomsBusiness Member
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
3y
@Sam Dorgalli your profile says "Real Estate Agent," and I agree with everything that you are doing. Keep plugging along.
Good Investing...
[email protected]949-625-4533
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Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Brett Deas That is what I have been doing. I do get creative when I analyze a deal. adding an ADU and converting the garage into an ADU is one of the things I consider.
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Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Joe Homs I am a real-estate agent but I only have been an agent since March. I am still learning the ropes but more help and a bigger circle wouldn't hurt :)
I do have a few investors that I am working with and they are willing to invest if I bring a deal, I just wanted to have more investors on hand cause one person might not find the deal appealing but someone else might.
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Joe HomsBusiness Member
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
3y
@Sam Dorgalli good for you. Keep working it...
[email protected]949-625-4533
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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
3y
Quote from @Sam Dorgalli:

Very excited to start investing in rehab's and rental properties. I have been analyzing 20 properties a day minimum. Problem is, no money. Solution, need a partner/investor. Question is, what comes first? the deal or the investor? What would you recommend my first step should be?

If you have an RE license you qualify for Hard Money Financing. The catch is 30% down.

A way around this is to partner up with experienced investors. If you find a good deal I am sure you can arrange an agreement.

Or you could partner up with other agents and pitch the deal. It's a lot easier to get away with no money down once you own 3 or more properties with substantial equity.
[email protected]818-269-7983
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Jacob St. MartinPro Member
Investor · Charlottesville Virginia · Member since 2021 · 348 posts · 346 votes
3y
I think that it is vitally important to be working on the deal side and the money side both. I typically have a deal that I am trying to find a cash partner for and then start pitching it to my network of potential investors. If you go to the investors without a deal then you obviously don't have a deal. But if you get a deal but haven't been networking with potential investors then someone else will probably close on that deal before you can. However, don't get discouraged! If someone snatches up a deal that you are trying to pitch, keep analyzing more deals and keep networking. You could go to the investors you are networking with and show them the deal that you didn't get and ask if they would be interested if you brought them a similar deal. Eventually you will have a relationship and a deal and will be able to secure a cash partner. Hope this helps!
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Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Erik Estrada that is pretty much what I need is a partner rather than an investor for a few reasons, one, is money, two is experience. I don't want my lack of funds and experience stop me.
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Sam Dorgalli
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Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Jacob St. Martin That is exactly what is going on in my mind. I have found some deals that the investors I am working with turned down to either not sure about it or lack of Cash on hand and the deal ends up being snatched by someone else. All I need is an investor that is reliable and to say "if you bring a deal and numbers make sense, I'm in". that is why I'm more interested in connecting with inventors rather than deals atm. However, I am still looking for deals based on what my investor's buying power is but that is limiting me from perusing other opportunities.
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Jacob St. MartinPro Member
Investor · Charlottesville Virginia · Member since 2021 · 348 posts · 346 votes
3y
It sounds like you are on the right track! The only other thing I can think of is that every single "no" that you hear is valuable. Learn from it. You might learn something that you can improve on or learn something about the investor so that you know to only bring them a certain type of deal.
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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
3y
@Sam Dorgalli
save up enough money for a down payment and reserves on a house hack.
2 Reply
Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Jacob St. Martin that’s been the plan so far, knowledge is what is most important to me right now, the more I learn the more confident I become.. thank you!!
1 Reply
Sam Dorgalli
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Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Nicholas L. I wish I knew about house hacking before me and my wife bought our condo back in 2017
0 Reply
Jordan Woolf
Flipper/Rehabber · Huntsville, AL · Member since 2019 · 117 posts · 57 votes
3y
@Sleeman Dorgalli if you learn how to find great deals everything else is a lot easier. Networking is also something that will take you a long way.
2 Reply
Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Jordan Woolf that’s why I’m here and there and everywhere talking to people, picking their brain and learning and growing and ideas :)
1 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Don't need money, need to be creative. If the deals good enough hard money will fund 100%. If you utilize seller finance you can be out of pocket $0
2 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
3y
@Sam Dorgalli
OK. It's tough to invest with no money. I would still recommend saving up some money. Or, rent out your condo, and move into a house hack.
3 Reply
Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
3y
@Sam Dorgalli Echoing what others have stated; it's EXTREMELY hard to start with no money. Let's not sugar coat that fact. Anything is possible but I'd rather focus my effort (time) on the path of least resistance. That means buying distressed with skin in the game (down payment, rehab funds, network of solid contractors, partnership split, etc.), adding value, and building a track record. Create a deal with your own money. I haven't meet any successful investors who skipped those steps. With a property or two under your belt money will find you for future deals. That's been my experience.
5 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y
Quote from @Sam Dorgalli:

You're probably killing yourself with a lack of specificity.
Investor: "If you bring a deal, I'll throw in some money."
OK...what constitutes a deal? How much money will you pitch in? There's nothing actionable there. So you find what you think is a deal, you take it back to the investor, he says, "That's not a good enough deal for me" or "I don't have enough money for that deal right now." Time wasted.
Get your investor to be specific. Ask him exactly what he is looking for and exactly how much money he's willing to commit if the deal comes along. It wouldn't hurt to generate a simple form you can use to get specifics from investors so you know exactly what to look for. This prevents you from wasting your time looking at deals that require $100,000 down when your investor only has $72,000 to invest, or analyzing single-family homes when your investor is only interested in multi-family. You should also have an idea of what they are looking for in terms of a return. Will they accept a property that produces a 12% cash-on-cash return? Are they a cash buyer looking for anything with more than 8% cap rate?
You can still throw them opportunities outside of their parameters, just in case. By being specific, you avoid wasting time and you present yourself as a professional.
This is good advice for you, as well. If you want to start investing, figure out what you are looking for, how much you can put into the deal, etc. Then tell everyone and their brother about it and someone will eventually bring you a deal. I told everyone I was looking for a fixer-upper priced under $100,000. After three months of talking about it, an agent from another office told me she had a hoarder house and the sellers were too embarassed to put it on the market. I bought it well below market price, tripled its value in six months, and the rest is history. You can read about it here: https://www.biggerpockets.com/...

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Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Nicholas L. I am open to this idea but my situation does not allow it at the moment for the lack of money for down payment for house hacking but definitely considering it
0 Reply
Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Jaron Walling 100% agree.. however, skin in the game is a tough option for me due to my financial situation and a business that’s on the verge or failing due to new state laws. Skin in the game = less resistance, no money = more resistance. My only choice is to go with the harder route and make it work. You make a very valid point but sometimes we work with what we got and all I need is a partner rather than an investor and my only contribution is sweat equity.
1 Reply
Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Nathan Gesneryoure right, I need to be on the same page as the investors I’m currently working with ATM and go from there.. thanks for the advice
1 Reply
Mohammed Rahman
Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes
3y
Hey @Sam Dorgalli - As you properly have already learned, the deal will always come first. When I first started I thought I would struggle to find buyers/investors and spent a lot of time sourcing them and cold calling. In reality, people have money and are always looking for ways to get a better return on their capital - the money is out there, it's looking for deals ;)
I'd also avoid the trap of wanting to spend upfront $$$ to market your business/brand in order to source deals. A lot of the resources you'll spend in the first 8-12 months should be your time & brainpower. I recommend finding local events as those are usually a hotbed of other investors, wholesalers, and the movers in your region.
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