Starting Rental Properties

23 Replies

Doubtful. The little to no money down hype is mostly that...hype. Success requires cash and high credit to qualify for loans. You will most likely require minimum 20% down.

There are ways to do no/low money down but it is very risky and 10X the amount of work to succeed. Failure rate is extremely high when you don't have the cash reserves to back you up.

I agree with @Thomas S. Too many people believe the hype of get-rich-quick gurus trying to sell you a book or a seminar. Save up the money, improve your credit score, and buy smart.

You can get lower down-payment deals through owner financing but it takes work and patience.

By the way, don't make the mistake of spending your last dime to make a deal work. Save some reserve to handle the inevitable issues that will pop up after closing (vacancy, unexpected maintenance, etc.)

Thanks guys, I had a feeling it was too good to be true. I’m going to take my chances and try the little or no money down strategies. I have about $5,000 available for reserves. Would this be okay for 2-3 small units?
@Michael Newman . Pay me 5k and I’ll teach you all the tricks to low and no money down. You ready? There aren’t any tricks or secret formulas. You’ll need money and good credit to go big in this game. Or you’ll need to partner with someone who has those things

One furnace. One going out in your primary three buys.

That's all it's going to take to break you like a matchstick.

I never use my own money to buy properties. Use vendor financing, subject to, contract for deed, joint ventures. Find motivated sellers to get properties at below market values so everything cash flows. I've done over 100 deals using these creative financing strategies. I agree with everyone. This is hard work and not a get rich quick approach, it's a get rich creative strategy.

I personally would love to see all of the no money down to low money down fantasy to actually become illegal to promotel I can't stand those folks advocating real estate investing with no money, no credit, and no experience. I mean there is always a chance you can jump off of a 100 foot cliff and survive but that is not the common or best way to get to where you want to go and 9 times out of 10 you will never make it, only jam yourself up. That is like telling people they can go down to any Casino and win 99 out of 100 times if you only follow their strategy.

There is always someone who wants to believe you can make something out of nothing and even become an easy millionaire doing it. Oh well !!!

I think you guys are way too quick to squash this idea. Just because it is not how you have invested, means it cannot be done? My response to the original question from @Michael Newman is this: investing with money in hand is easier. But if you are willing to hustle harder to find a great deal, you can invest with little to no money down. I'm closing one next week with no money down. No money down! Zero! So don't give up too fast. I will say it is a lot easier to go save 10-15k to plop down on listed property if you can get traditional financing. Best of luck!
@Michael Newman If you don’t have cash reserves you can screw yourself real quick ~ however if you have good credit and a high income you can get by wIthout having to have a pile of money sitting in a savings account waiting for toilets to break . Available lines of credit and a steady stream of extra money from your w2 job can’t mitigate that risk . There are ways to buy from tired landlords with very little down if you know what you are doing via a land contract . There is risk in every part of real estate so don’t get scared Instead just be educated before doing things . Crossing the street is risky if you don’t know what you are doing !

There is nothing that says you have to listen to anyone in particular. Most of us learn by doing so if you come up with a way, learn of a way, and can succeed with it then go for it. The no money down thing never made much sense to me and to be honest I have never even tried it although I could probably name several folks that swear by it and to be honest about that as well some have been quite successful but to me if it is not for everyone then it is a no go. There will always be someone in the croud that will stand up and say," hey I have done a milions of these deals". This is just not who I am or want to be. If you feel it is right for you then go pursue it and don't listen to anyone including me who tells you,"that is not the way to go"

Just because I have spent my entire life jumping 3 foot hurddles does not mean there are not people out there than know how to and can jump 6 foot hurddles. I have sceen and known about people who can cross the busiest high speed highways without getting creamed by a fast moving vehicle but just because there are others that do it does not mean I am going to try it. 

To each his or her own.

There is nothing that says you have to listen to anyone in particular. Most of us learn by doing so if you come up with a way, learn of a way, and can succeed with it then go for it. The no money down thing never made much sense to me and to be honest I have never even tried it although I could probably name several folks that swear by it and to be honest about that as well some have been quite successful but to me if it is not for everyone then it is a no go. There will always be someone in the croud that will stand up and say," hey I have done a milions of these deals". This is just not who I am or want to be. If you feel it is right for you then go pursue it and don't listen to anyone including me who tells you,"that is not the way to go"

Just because I have spent my entire life jumping 3 foot hurddles does not mean there are not people out there than know how to and can jump 6 foot hurddles. I have sceen and known about people who can cross the busiest high speed highways without getting creamed by a fast moving vehicle but just because there are others that do it does not mean I am going to try it. 

To each his or her own.

Depending on your market, $5k may not be enough. There's lots of creative financing like seller financing, private money, etc., but what the gurus don't share is you often need a good track record first before someone is willing to help you out.
@Michael Newman Michael you are asking for professional advice here I have noticed everyone has adviced you the same. Be realistic would you lend someone inexperienced like yourself 100% financing on 3 deals with only 5k as reserves? In this business you have think like a lender in order for your deals to make sense. I always advice new investors that don't have the sufficient cash to invest to get their real estate licensed so they can get a feel of their local markets invest in leads and work they way up on investing. A great way to learn faster is to help investors get deals and learn from them in the real world. Don't believe that hype my brother.