Funding for First Deal

[Linda Logan]

I'm looking for my first deal and am wondering what is the best way to set myself up for funding. I'm thinking of taking a HELOC out for the renovation but do I need to get preapproved with a HML or PML?

[Bryce Jamison]

I don't know if there is a "best" way, but there's ways to invest with more or less leverage. If you're more debt adverse, like me, you could save the cash, or sell possessions or non retirement stocks to fund your first deal. If you want as much leverage as possible you can use HELOCs, 401K loans, hard money lenders, pay day loans, and friend and family loans. Some of these debt strategies come with higher interest rates, but they are options. 

Some people even partner with others using the partners money and their skills to get deals done. This strategy way more often than not seems to work for seasoned investors with long track records of success. I'm not sure how someone with little experience can convince someone else to give them equity in their deal in exchange for unskilled labor.