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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Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y
@Sam Dorgalli, I always believe that the deal comes first.
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Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Jay Thomas I see how that is true. However, I strongly believe that both should be established at the same time. 1. what if you have a deal and no investor? then you're running around looking for an investor which takes time and by then, the deal will gone. 2. if you have a list of investors that you have an agreement with and you know what they're looking for, it makes it much easier.
for example, lets say I find a deal now and I have 0 investors/partners, by the time I find someone, its gone. however, if I have a list of investors/potential partners that I know what they're looking for, then as soon as I find a deal, ill present it based on what they're looking for. after all, deals have a time limit sometimes and can't wait for me to find someone. I guess it all depends on where you find the deal and how well its marketed. Some deals I receive are gone within 24hrs of having them sent to me. I guess it all comes down to where the deal is coming from.
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Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Mohammed Rahman the only $$ I've been spending it to market my real estate business, as far as investors and deals, i have not been spending money on, its mostly networking and looking for deals wherever I can. But I agree, finding deals is harder than finding investors. I just like to have investors on standby. thank you for the input!! every little helps :)
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James DainardPro Member
Real Estate Broker · Bellevue, WA · Member since 2015 · 415 posts · 1k+ votes
3y
Hey Sleeman,
This really depends on the market you're in locally and the market we're in nationally. It's a great question!
Go to where you can provide the most value.
In a market like right now where we're seeing more and more deals pile up on-market as interest rates get higher and more buyers leave the market, you probably want to be positioned where the money is. In this scenario it helps to be actively looking for investors with money. Regardless of the market conditions someone is buying and selling every day. If you can get connected with the people that are insulated from these markets you'll be solid.
Eventually, we'll return to a place where affordability rises again. In that situation if we get back to a deep sellers market you want to be working with sellers.
A balanced real estate business takes both of these things into consideration and adjusts output levels in response to the market. A good real estate business will anticipate these changes in the market and prepare in advance to be targetting the right clients. We thrive on lead gen but survive on cost control. Always consider revenue vs profit. Keep your costs down and get dialed in on what things are actually bringing in dollars towards your bottom line.
Hope that helps and best of luck!
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1 Reply
Dave Skow
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
3y
@Sam Dorgalli- 1) you might consider buying a SFR to be your primary residence and house hack to become a rental in the future 2) there are some zero and low down payment loan programs that you might be able to use 3) if you need to purchase as a rental - you will likely need to find other parties to assist
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Selina Banda
La Vergne, TN · Member since 2016 · 93 posts · 28 votes
3y
@Sleeman Dorgalli
Don't you have any equity in house are living now?
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Jonathan Taylor
Lender · Los Angeles, CA · Member since 2017 · 916 posts · 647 votes
3y
@Sam Dorgalli I would suggest the partner comes first. Deals are out there but to throw together a person who, in business terms, you will be married to. It shouldn't be something to rush into.
3 Reply
Sarita ScherpereelBusiness Member
Real Estate Agent · Chicago, IL · Member since 2018 · 659 posts · 376 votes
3y
Hey @Sam Dorgalli I find it helpful to have a deal in had. It's easier to show people what you can do than tell them. Having something in hand as a goal for what you'd like to purchase would be more enticing. Even if it's something that recently sold or is under contract. Just have some type of a model for what you'd like to find with a partner. Ultimately, trust your gut. If you're talking to someone that seems like a good fit then pursue that path. Just my two cents!
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Luka Milicevic
Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
3y
Step 1: Leave California.
You're in the most expensive market in the country and the most regulated market in the country. I wouldn't touch CA as a new investor.
Step 2: Network with people. Network a LOT. This is how you find partners and lenders that are good to go when you do find that deal.
Step 3: Find the deal. It has to be a deal. The only way you scale RE with no money is finding the best deals.
1 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
@Sam Dorgalli I was going to make some wise-crack about digging up the ghost of Carleton Sheets, then thought "aaah better check he didn't just cack or something" and OMG he's still at it! The guy is like four hundred years old, lol, and still at it!
Ok, look, trying to jump in with no $ is simple, your gonna have to science-the-sh.... no, wait, that's if stranded on Mars...... OK, your gonna have to sell your azz off!
Asking such a question on a place like BP, you'd have to expect the onslaught of ridicule and pessimism. And guess what, that's GOOD. Why good? because that's the reality, your looking to climb Everest, in sandals. Can it be done, yeah, it "can" but holy-cow is it rare. I speak from experience on this, I did my 1st deal exactly this way and it was anything but easy.
My advice, start via indentured servitude, lol. Yeah, it sounds funny but it's actually really smart. Because step 1 is pitching, pitching, pitching. Your gonna go to every legit investor you can find and throw out a simple pitch "I REALLY wanna be a legit REI, just like you. So, what can I do to serve you, to teach me?".
What's gonna happen is a ton of no's. And when you burn through that limited puddle you have of legit investors now, it's going to force you to go out and find others, and pitch them, and then go find more, and more, and more. By the time you get to a "yes" you will have achieved your 1st skill-set without even knowing it: How to find legit investors. And gotten a whole lot better at skill #2: How to talk to legit investors.
By connecting with the actual market movers there going to put you to task, which is how you will learn AND earn.
How you come to being an investor yourself, is simply redirecting that for yourself.
You can skip all the crazy jazzy jumping through thimble sized hops of fire to try and get a $0 deal done, and do REAL things that will teach, earn AND make those relationships that will bring $. Because once you get some good legit investor relationships under the belt, that's your early $, your ready made buyers. Right now, you get a deal your going to be right back on BP asking "I got a deal, now what?", and it's going to die on the shelf.
It's all about the connections, and what comes from there.
1 Reply
Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@James Dainard thank you so much for the input. As a new realtor, I'm working on building leads and recently I decided my geo after I realized that the turnover is so low (based on 2 years numbers). I believe that mistakes will happen through any journey weather its being a realtor or an investor as long as we learn. an I'm slowly learning :)
1 Reply
Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Selina Banda I do but my income does not allow me to pull that equity out :/
0 Reply
Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Jonathan Taylor I think you hit the nail on the head about what i was trying to get at with your anology. I want to partner with someone who I have a relationship with and can see eye to eye with. Everyone has different ways of running a business, the last thing I want is someone I can't get along with. I understand that many do business together and all there is numbers and dollar signs but I feel like having a partner is like you said, its someone you will be "married to." thank you for this!
1 Reply
Jonathan Taylor
Lender · Los Angeles, CA · Member since 2017 · 916 posts · 647 votes
3y
@Sam Dorgalli anytime. I, thankfully, had a pre partnership fall out and if we had rushed into a deal, it would have been messy. Take your time, find the right fit as two level heads are better than one.
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
Quote from @James Hamling:

@Sam Dorgalli I was going to make some wise-crack about digging up the ghost of Carleton Sheets, then thought "aaah better check he didn't just cack or something" and OMG he's still at it! The guy is like four hundred years old, lol, and still at it!
Ok, look, trying to jump in with no $ is simple, your gonna have to science-the-sh.... no, wait, that's if stranded on Mars...... OK, your gonna have to sell your azz off!
Asking such a question on a place like BP, you'd have to expect the onslaught of ridicule and pessimism. And guess what, that's GOOD. Why good? because that's the reality, your looking to climb Everest, in sandals. Can it be done, yeah, it "can" but holy-cow is it rare. I speak from experience on this, I did my 1st deal exactly this way and it was anything but easy.
My advice, start via indentured servitude, lol. Yeah, it sounds funny but it's actually really smart. Because step 1 is pitching, pitching, pitching. Your gonna go to every legit investor you can find and throw out a simple pitch "I REALLY wanna be a legit REI, just like you. So, what can I do to serve you, to teach me?".
What's gonna happen is a ton of no's. And when you burn through that limited puddle you have of legit investors now, it's going to force you to go out and find others, and pitch them, and then go find more, and more, and more. By the time you get to a "yes" you will have achieved your 1st skill-set without even knowing it: How to find legit investors. And gotten a whole lot better at skill #2: How to talk to legit investors.
By connecting with the actual market movers there going to put you to task, which is how you will learn AND earn.
How you come to being an investor yourself, is simply redirecting that for yourself.
You can skip all the crazy jazzy jumping through thimble sized hops of fire to try and get a $0 deal done, and do REAL things that will teach, earn AND make those relationships that will bring $. Because once you get some good legit investor relationships under the belt, that's your early $, your ready made buyers. Right now, you get a deal your going to be right back on BP asking "I got a deal, now what?", and it's going to die on the shelf.
It's all about the connections, and what comes from there.

YUp Money first ALWAYS next thing is line up your money first .. You know how many calls a month I get for funding's where someone locked up a nice deal put up their last dime on EM then goes looking for money only to run out of time and calls me as a last resort.. ??? at least 2 times a month and sometimes I can help most of the time NOPE and they wasted all this time BS ing some seller or agent that they could put the deal together lose their EM blah blah blah. forget all the advice of find the deal and the money will come to you.. for very experienced profitable investors sure that could be the case but for someone starting out your just wasting your time on a dream.. FIND THE MONEY so you can transact period full stop.
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Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Sarita Scherpereel I will take that advice. As a matter of fact, I recently found a deal that got turned down by one of the investors. maybe I can take it with me to my next meetup and if no one is interested, maybe at least I can get input from others to why it wouldn't be a good deal and boom!! I learned more :) thank you!
1 Reply
Garrett CrosbyPro Member
Real Estate Agent · Los Angeles, United States · Member since 2021 · 392 posts · 162 votes
3y
Hi @Sam Dorgalli - I'm actually very local to you. 10 minutes from Porter Ranch. I live in Simi Valley. Happy to chat or connect sometime to discuss this in detail. I have properties out of state and then invest here in LA too. Very different strategies and approaches... but everyone here who is saying the deal comes first is correct.
What you might want is some mentorship too so that when you find a "deal" it really is one. :) Getting started with 0 money can also be done with a lot of DPA programs right now if you're willing to househack too... but that's a completely different story/strategy.
Either way, I'm happy to help you if you want! Cheers.
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Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Garrett Crosby Hey Garrett!! I love all advice and would love some help. There is a bigger Pockets meetup in Chatsworth on Thursday 11/17 and I will be there come through if you can. I, as well as other members will be there and hopefully I can learn something new :)
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Scott Mac
Austin, TX · Member since 2019 · 5k+ posts · 5k+ 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?

Hi Sleeman,

@Nathan Gesner just handed you the keys to a Goldmine!

Don't fail to relize that. If we had a post of the day that would be it.

I will add to that....find 20 people who say they will invest with you..not hard money lenders..but as a co-member in an LLC with you..it will need some book keeping $$ and a yearly tax return as well as statments, and etc...$ you or you partner will have to pay that until the deal comes in as profits. Speak with one of the CPA's or tax prep experts in here to get an idea of the costs, and your time needed to come on board with their system.

Talk to them also about what they are seeing as far as profit splits, and loss splits. Paying attention to active vs passive investor rules.

Pay an attorney to draft up a FAIR LLC agreement for this...Read the agreement,,uderstand it 100%,,,,and follow it.

Not all LLC agreements will be FAIR to both sides, and being taken advantage of by someone who would do that is something you should avoid.

Which is why I say have your own.

Have the LLC done, then find potential investors, then find a deal suitable to ONE investor and to you. Multiple investors bring on a whole lot of other things. Avoid it.

And it will probably work out better for you if your investor is active vs passive. Discuss this with your accountant and lawyer.

Good Luck!

2 Reply
Sarita ScherpereelBusiness Member
Real Estate Agent · Chicago, IL · Member since 2018 · 659 posts · 376 votes
3y
Quote from @Sam Dorgalli:

@Sarita Scherpereel I will take that advice. As a matter of fact, I recently found a deal that got turned down by one of the investors. maybe I can take it with me to my next meetup and if no one is interested, maybe at least I can get input from others to why it wouldn't be a good deal and boom!! I learned more :) thank you!
Happy to help. I find it easier to pitch ideas when there is something a bit more concrete :)
[email protected]773-456-4644
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0 Reply
Brady Hales
Rental Property Investor · Provo, UT · Member since 2021 · 46 posts · 50 votes
3y
@Sleeman Dorgalli Follow @Pace Morby on YouTube as well as the Creative Real Estate with Pace Morby facebook page. I am part of this community and it is all about getting into real estate with no cash, credit, or credentials. He has a mentorship but honestly his free content is top notch and you could just pair up with one of his students if you would like. But his content is incredible and you really can do this!!!
0 Reply
Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
3y
@Sam Dorgalli Can you qualify for HELOC? You mentioned equity in your property. Idk your financial situation but I see light in your tunnel. Improve your debt/income, credit score, and shop around with other lenders. That could be fuel for an investment opportunity.
1 Reply
Kerry Noble JrPro Member
Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
3y
continue to network! Find the deal and then youll present it to your network.
2 Reply
Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Scott Mac This is a great way to structure the agreement. But what if I already have my own LLC and all I find someone to partner up with but don't want them to be on my LLC?
0 Reply
Sam Dorgalli
OP
Real Estate Agent · Porter Ranch, CA · Member since 2022 · 48 posts · 28 votes
3y
@Jaron Walling I probably could if I push the idea harder, but the idea is to invest with $0 out of pocket.. What I'm aiming for is to find a partner (not an investor) who is willing fund the deal where I'll put in sweat equity and handle the purchase and sale of the property and profits split 50/50.
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