Save first or look for properties first?

7 Replies

Hey guys 

I'm getting started in the journey that most of you are going already. I currently have a steady decently paying  job, but no cash to invest with. 

My question is, should I... 

a. first put aside money every month and save enough for my first down payment and then start looking for properties 

Or... 

b. Look for a good deal and then figure out how to creatively finance it. 

Thanks 

Sachin Acharya 

You should be doing both at the same time.  While creative financing is great, you wont always be able to make it work, there are a lot of things that have to align in order for that to work.  To buy a decent home I would think you have to be at about $60k minimum average so how long will it take you to save up the $12,000 + $4,000 closing cost? 

Good luck

This is going to be another controversial post from me...

1a. Look for properties to analyze
1b. Analyze properties to find the ones on which you want to make offers
1c. Make offers

2. Forget saving! Learn to find private money lenders. No one does this business alone. You need a network, and that network will need to include sources of funding. From time to time, you will need to look for hard money lenders, as well.

Why? Because your sources of funding profit when you profit. So, YOUR profits MUST occur first so you can pay interest to your lenders. That's part of your purpose as an entrepreneur: to make money for others by making money for yourself or your own business(es). Zig Ziglar said it this way: "You can have everything you want as long you help enough other people get what THEY want!"

... and no, you're NOT going to be getting loans from the banksters. The fallout from the crash has pretty much assured that! Even when you can get loans personally, they only let you have so many in your own name - an artificial limit you neither need nor want. Learn to acquire properties in business entities, even if you must personally guarantee what ever financing they acquire.

How many mortgage loans can you have in your own name? A limited number, generally around 10.

How many business entities can there be in your entity structure? As many as you need, and even if each only has one loan out, that's still more than you can have in your own name.

Very True...I usually offer my lenders 15% to 20% aslong as they give me what I want on my end.

David, Curt, and Dean, thanks for the inputs. 

Curt, I'm in Dubai. In this market, it appears to me that I need at least 30% to be able to cover the down payment and closing costs. That amounts to at least 120k Dhs considering that 400k as the starting price range.

Having said that, I'm just starting to understand the market. So my numbers may be a bit premature. Please let me know if anyone has any ideas, comments, etc. 

Hey sach! Im 99% sure that private lending is illegal in Dubai. So if you want to be creative, you need to look outside the UAE. Do NOT let this stop you from pursuing your goal. This is a challenge for you to overcome and yourfuture success will be even sweeter because of it. 

Perhaps the logical step for you to take is to find private lending outside the uae, and use that as downpayment and secure a mortgage through traditional lending. I think that is how i would approach investing in uae.

To answer your original question, i believe that you should save now while you learn as much as you can about investing, most importantly you need to learn how to separate a great deal from an average deal, and an average deal from a bad one. Your long term success depends on it