Grand Rapids, MI · Member since 2014 · 14 posts · 3 votes
I want to purchase a small property. Two to four units, and live in one while renting out the other(s). The problem is I don't have the best credit to get a loan, and I don't have any money to put down. I know it probably sounds crazy, but does anyone have any ideas on how I can get this done?
Truthfully, you are in an unenviable position. Having money for the first deal is a really good way to develop some credibility. Credit scores are a different issue, as they definitely take some time to remedy.
The approach from here is usually to syndicate a deal with private money. Basically getting other people to invest in your project. As a private money investor, I would not invest in someone without a track record. As a result, your best bet will be a friends and family round. Think of people you know who could get in on the deal, provide real value, and try to put down some money (5-10%, whatever). A little bit of money clues everyone that you have skin in the game.
For many private investors, access to funds is not a problem. Trust is a problem. If you can provide that trust and really deliver, then you can make it happen.
Truthfully, you are in an unenviable position. Having money for the first deal is a really good way to develop some credibility. Credit scores are a different issue, as they definitely take some time to remedy.
The approach from here is usually to syndicate a deal with private money. Basically getting other people to invest in your project. As a private money investor, I would not invest in someone without a track record. As a result, your best bet will be a friends and family round. Think of people you know who could get in on the deal, provide real value, and try to put down some money (5-10%, whatever). A little bit of money clues everyone that you have skin in the game.
For many private investors, access to funds is not a problem. Trust is a problem. If you can provide that trust and really deliver, then you can make it happen.
I am kind of in the same position as you or at least have been! Keep your attitude positive and just keep saying I can do this! And then ask yourself HOW you can. Learn and get comfortable talking with people.
One option is through an owner contract. If someone who is selling owns their property outright they may work with you and carry the contract/mortgage. In some cases they will be happy to have someone else handling the property and if you can get to know their situation, and they yours sometimes you can create a win win. Read up on seller financing structures and negotiations.
What can you bring to the table? Management? Upkeep? Give the seller a good interest rate?
Just my first kick at the can and hopefully this helps. Also look up zero down investing as a potential start to build your knowledge of structures that you can do with zero dollars.
1. Why is your credit bad? What can you do to improve it? Have you contacted a lender to help improve it? Do you know you can dispute things like hard inquires on your credit and dispute it and it is free.
2. Are you saving to get a down payment? Have you look into grants for purchasing? Also there are lending programs that help you with the down payment
3. Also have you thought about partnering up with someone? Also look into bridge loans or possibly getting the money gifted from your family or friends.
4. Also do a side hustle to make money. Like if you breed a AKC English bulldog you can raise money fast as soon as you get puppies ( that is a side note)