Start up money for a newbie investor

15 Replies

Hi can anyone give me some solid tips on how I can get the start up funds for my first property? I was thinking hard money lender but I would have to come up with like 30,000 then I was thinking maybe flip some houses to get the money. I don’t know where else to turn any advice would be appreciated.

@Ajeenah Wilkins , I am also incredibly new to this, so all I can share is what I’ve read/ learned through BP Podcasts. Do you own property currently? If so, do you have a sufficient amount of equity available? Home Equity Loans/Line of Credit is a potential option. How is your budget? Are there any unnecessary expenses that could be taken away to maximize your current income? I think I’d need more information to provide better support. But I highly recommend checking out the podcasts, there is tonnes of insight into this particular subject there.

@Ajeenah Wilkins you're going to need to save up a little more than that if you want to get into this business. Even if a hard money lender says they'll cover 100%, you will need to find an AMAZING deal to actually get that 100%, and even then there are still other fees and earnest money you will need to put down that are well over $1k. You should also have roughly a 10-20% buffer saved up above your rehab budget for unforeseen repairs that might need to be taken care of or for emergencies like a pipe bursting or a break-in.

Investing in real estate should be with your "play" money when you're just starting out, you don't want to be putting your entire savings into your first deal and have it go sideways and lose everything you've saved up.

There are some more ways than just saving up money. Is that the easiest way yes.  If you have money you can make money.  If you are broke can you make money?  yes there are ways and yes it takes tons of work and sweat equity to make it work.  You can find deals and double close them making some money on ach. I read a post here where a person did it like 40 times making a nice amount on each and then could buy a property outright and then kept reinvesting. Is that the nrmal? NO can it be done YES!
any other questions please tag me here i will respond.

You would find a deal and then put it under contract, stating a closing date of sometime in the near future, then you would find a buyer for that property they would give you a contract on the property for the same closing date.  
You would all meet and the person you are selling to will pay you your price that you agreed to minus the costs and then you would pay the seller what you agreed to in your contract.  The idea is this....you say i will buy this for 100k they agree, you then market it for 120k and someone agrees to sell.  you made 20k minus any fees.  

Originally posted by @Michele B. :

You would find a deal and then put it under contract, stating a closing date of sometime in the near future, then you would find a buyer for that property they would give you a contract on the property for the same closing date.  
You would all meet and the person you are selling to will pay you your price that you agreed to minus the costs and then you would pay the seller what you agreed to in your contract.  The idea is this....you say i will buy this for 100k they agree, you then market it for 120k and someone agrees to sell.  you made 20k minus any fees.  

 Also known as wholesaling

@Ajeenah Wilkins if you don't have much money, attempting to flip a house might not be your best first step. Wholesaling could be a good way to get your feet wet, but you also have to be careful there and make sure you have an out and you aren't stuck actually closing on the property if you don't have the funds.

Another option would be to partner with another investor to learn the ropes. Maybe invest what you have and get a small return, or negotiate a cut of the deal if you do a good chunk of the work. Try to get creative so you don't have to risk it all and you also get to learn the business while you earn.

@Ajeenah Wilkins

Hi I would honestly save up aggressively while learning for few months to year and take advantage of FHA or 203k or other low down payment options programs and house hack (allow offset mortgage), while buying a house that will allow you to have quick equity (Look up BRRRR) if done correctly. I'm not sure what your goal is to build a rental portfolio or flip houses or etc; but either one you should be able to refinance within year with the equity and pursue your goals.