How can someone new to real estate investments raise money?

Question

Hi everyone!

I want to start out investing in real estate. Apart from reading a lot about it I have no prior experience

in buying investment properties. I live in Sweden, but since my long term plan is to move to the US my wish is to start buying properties there. Investment properties in Sweden also seem very overpriced at the moment, with a lot lower cap rates than what the norm seems to be in the US.

I am 22 years old and working towards a master degree in finance right now. But I have very easy to learn new stuff so I do have quite a lot of free time, and my goal/dream right now is to spend that time starting a company in the US and begin to invest in real estate through the company.

I have ran a small business earlier, which made it possible for me to save up some money which I mostly invested in stocks. However, I only have about $100k that could be used to start the company and maybe cover some costs associated with acquiring properties. So my big problem is my lack of capital.

100k might of course be enough as a down payment to buy some small property, but the fact that I live in Sweden makes it feel sort of not worth it to fly back and forth to the US to run a ~400k property.

So, my question basically is if there are any ways to buy more expensive properties (say 700K - 4M) with 100% financing?

I have read some about strategies to buy real estate with no money down, but I am not sure if they really work. What do you think? Are there any ways to accomplish what I am trying to accomplish?

I am open to know about all thinkable ways of financing the entire purchase price. Seller-financing, equity investors, high interest loans for the downpayment, crowdfunding and whatever else possibilities that could work.

So, what do you think? :)

Account Closed · Answer

Private lenders can always help but 100% financing will be hard to get without credibility and even when you do get it they may not fund 100% of rehab or have some pretty tight rules or even points up front!

Bill Gulley · Answer

1. Labor is not skin in the game, it can only be recognized after completion and a sale, we call it sweat equity.

2. Never invest all you have with one person or with one deal!

3. Real friends never ask for money, but they may accept an offer.

4. Partner with a good friend only if you are willing to lose that friendship.

You have plenty to start with, you also have or are getting the right degree for real estate. Learn real estate before trying to learn how to deal in real estate!

Now, run over to Amsterdam and have fun! Good luck :)

Erik Öman · Answer

Thanks for all the answers! :)

I realise now I may have to start smaller and work my way up.

So for now I am just going to study a bit more, learn some more

about real estate investing and hopefully do my first deal soon when I am

a bit better prepared.

Westley Bachmeyer · Answer

$100k is a good amount to start investing in Houston, Texas and can get you a good piece of property when combined with financing.  Possibly even less than $100k.  In addition to that, there are a lot of Turnkey property companies that you can invest with, but if you are looking for complete non-involvement a REIT is the way to go.  Minor involvement and I would suggest crowdfunding or Turnkey.  I wouldn't try 100% financing unless you were putting in some MAJOR physical presence, it just wouldn't be worth it.

Daniel Chang · Answer

Experienced real estate investors are able to do no money down deals, but that's after they build the experience, network, credibility, etc.  In order for you to have no money down on your 1st deal, all the stars, planets, sun and moon would have to align.  In other words, it's not really realistic goal.

Sometimes, you need to turn the tables.  You have $100K.  A brand new, no experience but eager young person wants you to invest your $100K with him in a real estate venture.  That person isn't putting anything down...but he will put in work, effort, and sweat equity.  Are you willing to part with your $100K?

Thomas S. · Answer

Buying properties with no money down is high risk and in my opinion a fools path.

I strongly believe that the only way any investor should be looking to start is to work hard and earn the money they need. Once established you can then seek out other financial sources, partners etc.

With $100K you have enough to begin and should not be reaching for the stars.

Erik Öman · Answer

Okay, thank you for the answer. Do you think that a combination of bank loans, seller-financing and private lenders could work? Say 60% bank loan, 20% seller-financing and 20% private lender?

How can someone new to real estate investments raise money?

Most Popular Reply