Newbie getting first rental with creative financing
Hi all! I used to be very active here on BP in 2017 and was going to purchase my first rental property. However, I got analysis-of-paralysis like many newbies and now fast forward to 2023 and I still haven't invested in my first property. With that being said, I would like to look at creative financing options (sub-to, seller financing, etc.) to FINALLY get my first property in the DFW area (open to other Texas markets too).
Any suggestions on how to get my first rental? I would prefer to avoid banks due to higher interest rates. However, I am open to hearing any suggestions.
Thank you in advanced!
Most Popular Reply
If you would have bought ANYTHING in 2017, you would likely be sitting on multiple six figures of equity right now. I'm not saying that so you feel like you missed out, I'm saying that to convince you to take action this time.
I think in another 6 years people will say the same thing about 2023.
1. Don't discount bank lending. Just because interest rates are high it does not mean you should not be purchasing. The deal just needs to be good enough to support the debt service and still cash flow. I'd get preapproved with a lender and keep it in your back pocket while looking for deals.
2. Creative finance deals are hard to find. They are almost always found off-market. You'll need to create a system of contacting property owners and offering to buy their property with seller financing or subject too. In order to do that, you need to know what you're talking about.
Dive deep into how these creative financing strategies work and what the process would be like to purchase using them.
PS. It's significantly harder to find a SubToo or seller financing deal than it is to find a traditional financing deal. Don't let your fear of higher interest rates keep you out of the market for another 6 years. if the deal works, it works.