How did you fund your first deal

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How did you fund your first deal

Dyami Pike
Member since 2022 路 65 posts 路 21 votes

I'm looking at getting started in real estate and everyone talks about low/no money down. cause I've noticed that even a 10% down is $5k in my area, plus closing plus extra funds that the expect you to have. So even in the worst neighborhood in town I need $10k in cash. 

 My question is how did everyone fund there first deal(the part that the had to pay for)? 

did you save from your job, borrow from family, side gigs?

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Eliott Elias
Investor 路 Austin, TX 路 Member since 2021 路 9k+ posts 路 5k+ votes
3y

If the deal is good enough the money will come. I would rather borrow from investors than family. 

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  • Dan Latta
    Investor 路 Portland, OR 路 Member since 2016 路 2 posts 路 3 votes
    3y

    Traditional financing,  20%+ down earned from work & stock market. 

    3Reply
  • Dyami Pike
    OP
    Member since 2022 路 65 posts 路 21 votes
    3y
    Quote from @Dan Latta:

    Traditional financing,  20%+ down earned from work & stock market. 

    There you go! I like that method if you can save 

     It!

    thanks for the feedback!

    0Reply
  • Jared HottleBusiness Member
    Real Estate Agent 路 Cedar falls IA Waterloo, IA 路 Member since 2020 路 902 posts 路 549 votes
    3y
    Quote from @Dyami Pike:
    Quote from @Jared Hottle:

    I saved for years not knowing what to do with the money and then found real estate. If I could do it over I would start alot earlier and house hack with a conventional loan. 


    House hacking would've been how I started if I had known about this 5 years ago! And if I had started saving 5 years ago! 


     The best time to plant a tree is 20 years ago or today. Start now. See what you need to do to get pre approved for a loan and get after it. 

    [email protected]319-288-5382
    Jared Hottle Real Estate59 Reviews
    WebsiteView Page
    2Reply
  • Christopher BurgosBusiness Member
    Real Estate Agent 路 San Diego, CA 路 Member since 2020 路 22 posts 路 13 votes
    3y

    Hey @Dyami Pike

    I'm sure whatever you end up doing will definitely work out! Just stay on top of it and know your craft. There are hundreds of ways to get financing for your first deal. I'm reluctant to have the VA loan and purchased my first home about 8 years ago but with the price shift, I've been finding more and more people with the capital but not the time or knowledge on how to purchase. I would definitely network within your sphere and see who has some money and go in on the property together or pay them back with interest (I'd recommend the payoff part with interest, getting into a property with someone is bigger than being married in my opinion).

    Also, the minimum down payment for Fannie Mae and Freddie Mac is 3.5% for FHA and 5% Conventional. If you can work it as your "primary residence", meaning mail has to go to that property, then you can take advantage of those programs. Best of luck!

    1Reply
  • Dyami Pike
    OP
    Member since 2022 路 65 posts 路 21 votes
    3y
    Quote from @Jared Hottle:
    Quote from @Dyami Pike:
    Quote from @Jared Hottle:

    I saved for years not knowing what to do with the money and then found real estate. If I could do it over I would start alot earlier and house hack with a conventional loan. 


    House hacking would've been how I started if I had known about this 5 years ago! And if I had started saving 5 years ago! 


     The best time to plant a tree is 20 years ago or today. Start now. See what you need to do to get pre approved for a loan and get after it. 

    100% agree! But you should know where you're planting the tree first and what kind of tree!
    0Reply
  • Dyami Pike
    OP
    Member since 2022 路 65 posts 路 21 votes
    3y
    Quote from @Christopher Burgos:

    Hey @Dyami Pike

    I'm sure whatever you end up doing will definitely work out! Just stay on top of it and know your craft. There are hundreds of ways to get financing for your first deal. I'm reluctant to have the VA loan and purchased my first home about 8 years ago but with the price shift, I've been finding more and more people with the capital but not the time or knowledge on how to purchase. I would definitely network within your sphere and see who has some money and go in on the property together or pay them back with interest (I'd recommend the payoff part with interest, getting into a property with someone is bigger than being married in my opinion).

    Also, the minimum down payment for Fannie Mae and Freddie Mac is 3.5% for FHA and 5% Conventional. If you can work it as your "primary residence", meaning mail has to go to that property, then you can take advantage of those programs. Best of luck!


     I have a partner and we are combining funds to be able to do it, just seeing what everyone did and getting involved in the forums! 

    tha VA loan is great, My parents used that twice!

    thanks for the feedback!

    0Reply
  • Jay ThomasPro Member
    Real Estate Agent 路 Houston, TX 路 Member since 2021 路 1k+ posts 路 715 votes
    3y

    House hacking is a great way to get into real estate investing with conventional financing and 20% down from work. It's an accessible way of taking advantage of the potential returns that real estate provides while also having your own place to live.

    [email protected]832-889-5607
    1Reply
  • Dyami Pike
    OP
    Member since 2022 路 65 posts 路 21 votes
    3y
    Quote from @Jay Thomas:

    House hacking is a great way to get into real estate investing with conventional financing and 20% down from work. It's an accessible way of taking advantage of the potential returns that real estate provides while also having your own place to live.

    Absolutely! Love that strategy! 
    thanks for the feedback!
    0Reply
  • Account Closed
    Chicago, IL 路 Member since 2019 路 12 posts 路 6 votes
    3y

    @Dyami Pike

    My wife and I saved all of the money we put down and didn鈥檛 borrow from anyone. I didn鈥檛 like that idea and we had the same goal and dream so we saved together and did it. It took a little while but it was worth it. 3 flat in my old neighborhood I lived in. I recommend to save, because going through that process of saving, hustling and then finally putting that money to use, achieving your goal of owning that property is all part of it. And you learn how and where you can save also.

    2Reply
  • Dyami Pike
    OP
    Member since 2022 路 65 posts 路 21 votes
    3y

    My wife and I saved all of the money we put down and didn鈥檛 borrow from anyone. I didn鈥檛 like that idea and we had the same goal and dream so we saved together and did it. It took a little while but it was worth it. 3 flat in my old neighborhood I lived in. I recommend to save, because going through that process of saving, hustling and then finally putting that money to use, achieving your goal of owning that property is all part of it. And you learn how and where you can save also.

     That's true! I think cutting your spending is great for saving but also just for financial security! 

    thanks for the feedback!

    0Reply
  • John MorganPro Member
    Rental Property Investor 路 Grand Prairie, TX 路 Member since 2018 路 2k+ posts 路 2k+ votes
    3y

    I raided our Roth IRAs (tax free) and took out a HELOC for my first 2 deals. Then did a cash out refi on my primary for my next 3 deals with 20% down. I've bought almost all of mine from equity built up not doing anything for me. Mostly from cash out refis. It felt like buying houses for free since it didn't cost me anything out of pocket.

    1Reply
  • Dyami Pike
    OP
    Member since 2022 路 65 posts 路 21 votes
    3y
    Quote from @John Morgan:

    I raided our Roth IRAs (tax free) and took out a HELOC for my first 2 deals. Then did a cash out refi on my primary for my next 3 deals with 20% down. I've bought almost all of mine from equity built up not doing anything for me. Mostly from cash out refis. It felt like buying houses for free since it didn't cost me anything out of pocket.


     I love it! As I pay off my house, I'll do that as well! 

    thanks for the feedback! 

    1Reply
  • Corby GoadeBusiness Member
    Investor 路 Boise, ID 路 Member since 2014 路 3k+ posts 路 3k+ votes
    3y

    This concept of "low and no money down" investments is one of the biggest dream killers in real estate, in my opinion. It's not that those deals aren't out there, but finding and negotiating them takes so much time and energy. I know plenty of full time wholesalers with entire teams of acquisition people and VAs and they still rarely come across those deals. When they do, it's almost always offset by a higher purchase price, higher interest rate or other terms that would scare a new investor out of their shorts. 

    Here's the truth, and I won't even charge for the free advice; if you are getting started and have little to no money, start working towards buying a small multi to house hack in your market with an FHA loan. Then do that again in a year or two. Then again. IF you do that simple, LOW risk thing every two years for a decade, work will become optional for you.

    There are no new tricks in real estate, there's no magic or secret deals that you should wait for. This is a very old business and the simple fundamentals work and there is infinite proof that it works. Don't spend five years analyzing deals to death, start house hacking and let a bank's money work for you. Easy peasy. 

    Good luck!

    2Reply
  • Jacob SloopBusiness Member
    Rental Property Investor 路 Virginia Beach, VA 路 Member since 2020 路 274 posts 路 111 votes
    3y

    Owner occupied duplex, conventional loan 5% down  !

    Cash flowed for years and when I sold was the spring board for future investments

    [email protected]757-235-0369
    Jacob Sloop538 Reviews
    WebsiteView Page
    0Reply
  • Dyami Pike
    OP
    Member since 2022 路 65 posts 路 21 votes
    3y
    Quote from @Corby Goade:

    This concept of "low and no money down" investments is one of the biggest dream killers in real estate, in my opinion. It's not that those deals aren't out there, but finding and negotiating them takes so much time and energy. I know plenty of full time wholesalers with entire teams of acquisition people and VAs and they still rarely come across those deals. When they do, it's almost always offset by a higher purchase price, higher interest rate or other terms that would scare a new investor out of their shorts. 

    Here's the truth, and I won't even charge for the free advice; if you are getting started and have little to no money, start working towards buying a small multi to house hack in your market with an FHA loan. Then do that again in a year or two. Then again. IF you do that simple, LOW risk thing every two years for a decade, work will become optional for you.

    There are no new tricks in real estate, there's no magic or secret deals that you should wait for. This is a very old business and the simple fundamentals work and there is infinite proof that it works. Don't spend five years analyzing deals to death, start house hacking and let a bank's money work for you. Easy peasy. 

    Good luck!


     Thanks for the feedback! House hacking would've been the way to do it, but I bought without considering that. 

    just looking to see all the ways that other people funded their first investment!

    1Reply
  • Corby GoadeBusiness Member
    Investor 路 Boise, ID 路 Member since 2014 路 3k+ posts 路 3k+ votes
    3y

    @Dyami Pike Gotcha. I house hacked a SFH with an FHA loan for my first investment.

    Just because you already have a property, doesn't mean you can't house hack now. No time like the present!

    1Reply
  • Dyami Pike
    OP
    Member since 2022 路 65 posts 路 21 votes
    3y
    Quote from @Corby Goade:

    @Dyami Pike Gotcha. I house hacked a SFH with an FHA loan for my first investment.

    Just because you already have a property, doesn't mean you can't house hack now. No time like the present!

    I agree! I'm definitely gonna look into it!
    1Reply
  • Dennis Nguyen
    Real Estate Agent 路 Seattle, WA 路 Member since 2017 路 150 posts 路 80 votes
    3y

    My first house I bought 5% down owner occupied conventional. Was able to get down-payment assistance from my lender at the time and then used that property as a house-hack. 

    1Reply
  • Dyami Pike
    OP
    Member since 2022 路 65 posts 路 21 votes
    3y
    Quote from @Dennis Nguyen:

    My first house I bought 5% down owner occupied conventional. Was able to get down-payment assistance from my lender at the time and then used that property as a house-hack. 


     There you go! I haven't heard from anyone using down payment assistance, but I've looked into it a little bit! Thanks for the response! 

    0Reply
  • James Wise
    Real Estate Broker 路 Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH 路 Member since 2013 路 31k+ posts 路 20k+ votes
    3y
    Quote from @Dyami Pike:

    I'm looking at getting started in real estate and everyone talks about low/no money down. cause I've noticed that even a 10% down is $5k in my area, plus closing plus extra funds that the expect you to have. So even in the worst neighborhood in town I need $10k in cash. 

     My question is how did everyone fund there first deal(the part that the had to pay for)? 

    did you save from your job, borrow from family, side gigs?


     Cash & A Discover Card.

    1Reply
  • Dyami Pike
    OP
    Member since 2022 路 65 posts 路 21 votes
    3y
    Quote from @James Wise:
    Quote from @Dyami Pike:

    I'm looking at getting started in real estate and everyone talks about low/no money down. cause I've noticed that even a 10% down is $5k in my area, plus closing plus extra funds that the expect you to have. So even in the worst neighborhood in town I need $10k in cash. 

     My question is how did everyone fund there first deal(the part that the had to pay for)? 

    did you save from your job, borrow from family, side gigs?


     Cash & A Discover Card.

    I've heard a few people did it with credit card advances! Thanks for the feedback!
    0Reply
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