So here I am chomping at the bit trying to figure this thing we've come to love(or hate) called Real Estate Investing and I need some HELP. I'll try and keep this short.

I'm at a point where I feel like I've learned enough to get started, I've scoured BP, read the J Scott's books, and am trying to keep up with the podcasts. But for time sake lets lay this out:

I'm 26.

720+ credit

$8k Auto Loan

$2K-ish in savings

Do not own a home

SO with that said, I don't 20% to put down on a SFR rental or multifamily for that matter. An owner occupied multifamily makes the most sense, right? Enter stage left roadblock #1, the few folks I've dealt with(local CUs) require 20% down even for an owner occupied multi family. My intermediate goal at the end of the day is CASHFLOW. I've even found a couple of deals that cashflow pretty well. So how can I make this work? It doesn't make sense to get hard money from a family friend and pay them what cashflow I would make for the next 2 years. Am I missing something? Not structuring the deal right? Or are the deals I'm running across not as good as I think?

Thanks in advance for any and all help!

@Daniel Michalik

Hi there!

With nothing to go on here except high level guidance, you might consider hard money or a private lender to get into the property and then refi out as soon as you can.

If the deal is good, you should have 20% equity when you purchase it, and be able to pull most of your original funds out of the deal.

That's one way, although I'm sure there are others.

Where are you located?

Steve.

@Steve Veen  

Hey Steve, I'm in Beaumont, Tx. I could send you some of the numbers I have worked up . I'm sure that'll shed a lot of insight.

Find a partner, one with the money you need for the down payment.  This can either be a short term loan (GAP Partner) of give them a smaller part of the returns/equity (they put in 20%, give them 20% of the deal).  If the cash flow is good, they will probably get a better return either way they come in, than when they are getting now.  Since they are bringing in cash, show them what their cash on dash return will be.  I bet you get more than one person interested.

Here's the thing.  If they are interested in this one, and they make money, I bet they become a source of cash for you on future deals as well.

Joe Villeneuve
REcapsystem
A2REIC

@Daniel Michalik  

Sure. You can PM me or better yet, post the numbers here. You'll get a great response!

Steve

@Steve Veen  

Heres how the deal breaks down:

SFR, 2bed/1 bath, built 1962, 1064sqft

Doesnt appear to need any repairs currently 

County appraisal: $43,435

Asking: $44,900

Tenant occupied paying $850/mo and all utilities

Expenses(mortgage, ins, tax) $405

NO HOA

Need to add vacancey and Capex percentages to this

You listed mortgage as part of the expenses. Is that if you borrowed the money from a friend? How much are you figuring for the mortgage?

I don't have my spreadsheet handy, but with these numbers and no repair work, I would think you could pay almost 10% interest only to your friend and still come out with 100 or more in cash flow. 

Check out J Scott's rental spreadsheet and plug in the numbers. 

And beware the roof. It could be a big expense in the future if it's getting old. 

Steve

Putting $9k down. $2 of mine $7 from the friend. So total loan amount $38,145 with closing included, And this is where I start getting lost.