how to approach a lender with no money!

5 Replies

Ok guys! I am just going to be straight forward and would love it if you could tell me if this is possible:

I am looking to sign a master lease with a seller, (if he agrees) at 3000.00 a month. There are 8 properties in total and currently 5 of them are renting out for at least 550.00 a month (2750+). One of the properties is worth 975.00 a month in rent and was recently vacated in January due job relocation. The house is beautiful. The seller doesn't doesn't want to rent it out as of now because he is looking to exit REI altogether, which is where I come in. I want to take over these properties and make this situation a win win for both of us, especially due to the idea that his numbers for buying the properties outright are outside of anything an investor would want to pay.

So here is my question:

I want to be able to offer him a down payment in the amount of 3000 and have 2000 put up, in case of emergencies to begin with. All in all, that is 5000.00 that I would be asking a lender for. My credit is not good, and at the current time, I am struggling to make ends meet in my own household. BUT the money for the loan is there, even at 13% interest! I am totally prepared to take this on, while I continue to wholesale, but I need to know, WOULD ANYONE be willing to loan to someone like me with this type of opportunity in front of them?

I'm going to meet with my seller in the morning so I would love to know if this is possible.

Thank you so much in advanced!

For getting any type of loan, your credit score must be good. But as you said that your credit score is bad, then it will going to be very tough for you get loan.

The struggles of starting from the bottom! Lol its fine, there are ways of doing everything.... I won't let my past be a road block, but thank you for replying! :) 

Don't give up! Bill Gates started at a garage.


You're not ready to tackle this. The scenario you presented above is not very coherent due to your lack of real estate knowledge. It's not a bad thing. We all have to learn to how crawl and walk before we can run.

Let's go through the scenario. 

1) say the gross rent is $5,250/month (6 condos x $550/mo) + (2 homes x $975/mo).

2) you sign a master lease and give the seller $3k/month in rent/lease so you're left with $2,250. Say property tax, insurance, HOA dues, repair, maintenance etc is $2k/month, you're left with $250.

3) how are you planning on borrowing hard money at 13%? At a $300k loan, that $3,250/month in INTEREST ONLY debt service. How are you going to make this deal work? I'm not even talking about "no one will lend you the money."

4) it MIGHT work if you're talking about seller financing at reasonable 5%-6% interest rate. Maybe even at 7% interest rate. 

Since the seller has accumulated 8 properties over the years, my guess is that he's more knowledgeable than you. Given the fact that you're struggling to make ends meet, don't let your first transaction bury you alive. Get more knowledge before you tackle something like this. A lot of the stuff you read may not make sense now. They will make sense when you have acquired enough knowledge. This might be a very costly mistake that you can't afford to pay given your financial circumstances. 

If you still want to move forward with the deal, go to the appointment. Do less talking and more listening. Hear the seller's wants, needs and motivation. Then tell him that you will discuss with your partner to see if you can offer him what he wants. Then get a local mentor who really knows what s/he's doing. There are a lot of BS mentors out there so don't get conned. Even with all that said, I still believe you're not ready to tackle this deal. It's just over your head at the moment. 

Best of luck.

Great job on finding the deal.

It keeps me motivated as a newbie myself.

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