Seeking Funding Guidance and Private Lender Connections

Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes

9mo

hi Nicole. a few reactions to your post, in no order.

-can you invest either where you are located, or within a few hours? out of state + rehab + first deal = spectacularly high risk. your post is very focused on financing but that is not typically the most difficult aspect.

-new investors shouldn't look for "private money." if you're buying a distressed property, you should work with a local hard money lender. how to find such lenders? meet with other investors in the market and ask who they're working with. or if you're not buying a distressed property, you can just use conventional or DSCR financing.

-if you purchase, rehab and refinance a property - basically a BRRRR - it's not going to cash flow in the short term. at all. BRRRR is an equity strategy, not a cash flow strategy. or if that's not what you're looking to do - OK. but if you buy a random property that requires a major rehab, you're going to have a bunch of cash stuck in it and your return is likely to be very low.

-the low end of your purchase price range is too low... you're going to be looking in challenging neighborhoods. would strongly recommend not buying in that range.

i hope this helps. i would be happy to connect to discuss further. i don't have anything to sell and am on BP to help new investors not lose money. i just completed a modest BRRRR that i'm very proud of. zero cash flow but i created equity. equity is the name of the game.

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Nicole Matteson
OP
Member since 2025 · 2 posts · 2 votes
8mo
Quote from @Nicholas L.:

@Nicole Matteson
hi Nicole. a few reactions to your post, in no order.
-can you invest either where you are located, or within a few hours? out of state + rehab + first deal = spectacularly high risk. your post is very focused on financing but that is not typically the most difficult aspect.
-new investors shouldn't look for "private money." if you're buying a distressed property, you should work with a local hard money lender. how to find such lenders? meet with other investors in the market and ask who they're working with. or if you're not buying a distressed property, you can just use conventional or DSCR financing.
-if you purchase, rehab and refinance a property - basically a BRRRR - it's not going to cash flow in the short term. at all. BRRRR is an equity strategy, not a cash flow strategy. or if that's not what you're looking to do - OK. but if you buy a random property that requires a major rehab, you're going to have a bunch of cash stuck in it and your return is likely to be very low.
-the low end of your purchase price range is too low... you're going to be looking in challenging neighborhoods. would strongly recommend not buying in that range.
i hope this helps. i would be happy to connect to discuss further. i don't have anything to sell and am on BP to help new investors not lose money. i just completed a modest BRRRR that i'm very proud of. zero cash flow but i created equity. equity is the name of the game.

Hi Nicholas,

Thank you for taking the time to share your perspective. I really appreciate the candid feedback and the intent to help new investors avoid costly mistakes.

To address your points:

Regarding investing locally: we currently live in San Antonio, Texas, but due to my husband’s military service, our location is temporary and subject to change. Because of this, we are being intentional about investing in a market we view as long-term and stable for us personally, which is Wisconsin where our family is located and where we plan to retire. We understand that out-of-state investing on a first deal carries higher risk, which is why we are focused on building a strong local team (agent, property manager, contractors) and taking a conservative approach.

On financing: I understand your point about new investors typically working with local hard money lenders for distressed properties or using conventional/DSCR financing for stabilized assets. We are still evaluating the best financing path depending on the deal structure and condition of the property, and we agree that financing alone is not the hardest part—execution and risk management are.

Regarding BRRRR and cash flow: I appreciate the clarification. We understand that BRRRR is primarily an equity strategy rather than a short-term cash flow play. Our intent is to be clear on the strategy per deal whether equity-focused or cash-flow-oriented and to avoid overleveraging or tying up capital inefficiently in heavy rehabs that don't align with our goals.

On purchase price range and neighborhoods: that’s a fair point, and we’ve been refining our buy box as we continue learning the nuances of each submarket. We are prioritizing safer neighborhoods and understand that going too low on purchase price can introduce risks that outweigh the perceived upside.

Thank you again for offering to connect and for sharing your experience. I'd welcome the opportunity to continue the conversation and learn more from your BRRRR experience when timing allows.
Nicole
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Bryce JamisonPro Member

Rental Property Investor · Mebane, NC · Member since 2015 · 493 posts · 439 votes

9mo

I understand the desire to scale fast, but I'd advise taking the path of the tortoise, at least for your first few deals.

Save up money and become an expert on your buy box so when a good buy comes up you'll recognize it right away.

After you've bought a few properties using your own money (down payments and rehab) you'll have the experience and creditability to explore fancier funding methods. By that point you may find you don't even need to use some of the more complicated strategies.

1 Reply

Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes

8mo

Quote from @Nicole Matteson:

Hi BiggerPockets community,

I’m a rookie investor preparing for my first rental and looking for guidance on funding options, as well as potential connections with private lenders.

Quick background:

W-2 income: Physical therapist (stable, long-term employment)
Credit: Strong
DTI: 0 (all car loans paid off)
Dependents: None
Strategy: Buy-and-hold rental
Market: Out-of-state investing
Experience: First deal / rookie

Target deal range (flexible):

Purchase price: ~$50k–$150k
Estimated rehab (if applicable): ~$10k–$40k
Total capital needed: ~$70k–$190k
Goal: Conservative, cash-flowing long-term rental

I’m currently evaluating different funding paths and feeling stuck despite having strong personal finances:

- Personal loans: I qualify but prefer not to use them due to potential credit impact and limited scalability.

- Portfolio loans: I’m interested but unsure how to approach local banks or credit unions, especially as an out-of-state investor.

- Private money: I’m actively learning how private lending works and what terms typically make sense for a first-time investor.

My long-term goal is to supplement and eventually reduce reliance on my W-2 income, transitioning to part-time physical therapy while building a sustainable rental portfolio.

I’d appreciate insight on:

- Funding structures that make sense for a first-time investor

- Whether portfolio loans are realistic for out-of-state rentals

- What private lenders typically look for when working with a rookie borrower

- How to structure a low-risk, lender-friendly first deal

I’m conservative, numbers-focused, and interested in long-term lending relationships rather than one-off deals. Happy to provide additional details if helpful.

Thank you for your time and guidance.

Nicole

Not trying to burst your bubble, but expectng a couple of rentals to replace your W-2 income is unlikely to happen in today's environment.

If you look into mMost of the huge success stories here on BP, most of the investors bought 5+ years ago - and have benefitted from unusally high value & rent appreciation.

Currently, the market is more akin to investing pre-2008 Crash => everything is slow & steady. It's more about building a retirement plan than replacing your W-2 job.

What you haven't shared, so we can better assist you, is how much cash you have to work with?

If you have 20% down, you should look at FNMA investment loans. They have the best rates on 30-year fixed.

DSCR loans are at least 0.5% higher, also require 20% down, but are a bit more flexible.

Private Money is just that, PRIVATE => meaning you know the person lending the money and they believe in what you are doing.

Then there's Hard Money, which is very expensive and should only be used for 6-12 months - or less. Typically used to buy & renovate, then you sell (flip) or refi (to rent) to pay it off.

You stated your husband is in the military and location is temporary. So, why aren't you buying primary residences in each temp location? You can put less down and have better control setting the property up to eventually rent it out. You can even take your time finding and local PMC to take over when you relocate.

[email protected]248-209-6824

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Seeking Funding Guidance and Private Lender Connections

Seeking Funding Guidance and Private Lender Connections

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