Funding my first deal with little to no capital

5 Replies

Hello everyone!

I’m a new investor that is looking for my first deal.

I have come across a duplex listed for sale by owner for $135,000. Both units are already rented to long term tenants for $750 a month. Location is South Bend Indiana.

I have no capital to offer in the deal as of right now, but I would like to approach the deal as owner finance. I cannot house hack the property since both units are already rented. I don't believe that i personally need to have capital to get started, but every time i find a deal that i get excited about i get frozen, don't act, and lose the opportunity

First thing I need advice is how can I approach a deal with no money?

Second is the actual numbers for the property. I feel I need to increase the rent per unit by $20 a unit to be where I want to be.

i have done everything i can to get involved in investing in my local area. I started a Facebook group for local investors, i attend seminars, i reach out to sellers, talk to agents, etc. I can get a heloc on my current resident, but that is the only option for me personally to come up with any sort of money. I have friends and family that are interested in getting involved, but i want my first deal to be on me to prove myself first.

I appreciate any and all advice!

Thanks

Korey

Numbers aside, If he is willing to hold the note you will still probably need a down payment to get into it and some reserves once you are operating the property until you can refi it. If the income from the property would cover the seller finance note and still leave you some cash flow you could take out a personal loan for like 20k, give him 10% down and hold the rest for reserves. You will need to show some cash reserves if you are going to refi out of the seller note so that will help out there too. It would have to be a strong deal for me to go after it like this and if the cash flow isn't there to comfortably cover both notes it would obviously be a no go.

@Korey Scott What neighborhood is this in? Sounds like a thin deal in this area especially with seller financing. If it is a good deal then you just need to fish around to see if the seller would be interested in seller financing. Ask questions to see what they want the money for and why they are selling. Tell them the benefits of seller financing for them.

i figured it out. 2% is great! all that i want is $100 cash flow per door. i can adjust rents with the current tenants. i will talk to the owner and just talk with them on why they are selling and go from there. There is a first time home buyer program in this area. We own a house but its all in my fiance's name. I will use that program for whatever deal i come by and pull a heloc on our house for any issues with the property. I admit the deal is lien, but its a newer property and close to home.. we will see.

Sounds like you are making some head way. I would encourage you to verify that any first time home buyer program you use will be available for an investment property and not just for owner occupied loans. I doubt it will be. Good luck.