New Investor looking to land his first rental within 6 months!

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New Investor looking to land his first rental within 6 months!

Ryan Maguire
Real Estate Agent · Toledo, OH · Member since 2020 · 14 posts · 12 votes

Hello everyone,

I am pretty much brand new to this. I have been listening to BP podcasts for a couple months now, and it has really opened my eyes. I live in the Buffalo NY area, and want to land my first SF or small MF rental within the next 6 months. I would like to invest in the Buffalo, NY or Cleveland, OH market. I have some cash set aside, but would much rather keep that in the reserves if possible. 

I have read into wholesaling and believe that might be a great option to raise enough capital for a down payment. Another option would be to use the BRRRR method and use as little of my own cash as possible. However with it being my first deal, that might be to big of a jump.

I truly just want to "get into the game" within the next 6 months, and think that is very possible with the prices in my market. 

For all of you investors who have had success using little to none of your personal money, what advice and suggestions do you have for me to land my first deal?

Thanks everyone!

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Luke Marsh
Property Manager · Cincinnati, OH · Member since 2019 · 131 posts · 237 votes
6y

As Matthew mentioned, I think two realistic options for someone with little capital is either using an FHA loan, or doing wholesaling. I would also rather have that capital go into a home, instead of wholesaling but it is really up to you and what your preference is. Best of luck!

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  • Felix Markman
    Member since 2020 · 2 posts · 1 vote
    6y

    Hi Ryan,

    I'm new to the game as well. You can go through a 0% funding process to secure a handful of 0% credit cards (18 months), and use the proceeds to put a down payment down. Of course, this isn't the same as using OPM. I'm new to the game as well, and so far, I've relied on traditional lenders. I purchased a rental property in the Phoenix area using a credit union as my mortgage lender. Credit Unions can be better to work with than banks. 

    I had conversations with many lenders this year, and lending standards are much more strict since March, when the crisis set in. Long term, I'm working on building business credit, having credit agencies report based on my entity to ultimately get loans assigned to my entity rather than in my name. I'd be interested in speaking with you about a multi-family opportunity. It's much easier to get a mortgage with two names than on one name. 

    Good luck,

    Felix

    1Reply
  • Anthony Dadlani
    Investor · New York City, NY · Member since 2013 · 1k+ posts · 269 votes
    6y

    @Ryan Maguire congrats on moving forward towards your real estate goals. Remember transactions create profit and wealth, not conversations or considerations. At some point you have to jump into the water to learn to swim. Best of luck in all your endeavors.  

    1Reply
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    6y

    @Ryan Maguire the most realistic strategy for someone with little Capital that wants to invest in RE is to use an FHA loan. Its how I started as well as a bunch of people on there. You can get a double for as little as 3.5% down. You can live in half, upgrade with sweat equity, and move out when you have saved more Capital for your next purchase.

    Wholesaling can work to get deals and make money but, it also requires Capital for marketing.  In my opinion you are better putting that Capital into a home that immediately starts building wealth than trying your hand at wholesaling. 

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    2Reply
  • Luke Marsh
    Property Manager · Cincinnati, OH · Member since 2019 · 131 posts · 237 votes
    6y

    As Matthew mentioned, I think two realistic options for someone with little capital is either using an FHA loan, or doing wholesaling. I would also rather have that capital go into a home, instead of wholesaling but it is really up to you and what your preference is. Best of luck!

    3Reply
  • Ryan Maguire
    OP
    Real Estate Agent · Toledo, OH · Member since 2020 · 14 posts · 12 votes
    6y

    @Matthew Irish-Jones

    Great advice! I really appreciate it.

    1Reply
  • Ryan Maguire
    OP
    Real Estate Agent · Toledo, OH · Member since 2020 · 14 posts · 12 votes
    6y

    @Luke Marsh thank you! I really appreciate it.

    0Reply
  • Ryan Maguire
    OP
    Real Estate Agent · Toledo, OH · Member since 2020 · 14 posts · 12 votes
    6y

    @Anthony Dadlani very well said. Thanks for your input!

    0Reply
  • Jacob Repreza
    Real Estate Agent · Orange County, CA · Member since 2016 · 207 posts · 111 votes
    6y

    @Ryan Maguire we wholesale but for yourself as a newbie starting out, wholesaling can get overwhelming if you don't have some sort of  real estate foundation and you will have to use funds for marketing , dialers, post cards etc etc 

    Another alternative is to simply find someone to partner with. Sure it's a little more difficult now depending on your area and lockdown/ group restrictions but still possible. 

    0Reply
  • Martin Grizzanti
    Investor · Rochester, NY · Member since 2015 · 499 posts · 169 votes
    6y

    Rochester is a good place if you are ok with an hour away

    0Reply
  • Brett Johnson
    Member since 2018 · 5 posts · 3 votes
    6y

    I am also new and looking to get into real estate investing, and have been listening to BP podcasts for about 18 mos. I have mainly been looking at different Turn-Key providers(HomeUnion, REINation, Norada, etc) as a way to get started. My main question comes down to the viability of financing options. We have a large amount of equity in our primary residence(close to 400k+), and was thinking of using some of that equity to fund the purchases. Where I am stuck is would it be better to obtain a mortgage on the rentals for tax reduction on the rent cash flow, refinance our home and use cash out to purchase properties outright, use our HELOC(100k available, 3.25% rate), or some combination of all options. we owe 167k on our mortg for our primary home, 3.75% 30y fixed, about 1200/mo pmt. Besides building a long term wealth plan, I am also looking for additional tax write-offs/benefits to lower our annual tax bill. Thanks in advance for any/all input and advice!

    Brett J

    0Reply
  • Marco Santarelli
    Specialist · Orange County, CA · Member since 2008 · 2k+ posts · 623 votes
    6y

    @Brett Johnson — Welcome to BiggerPockets!

    You bring up a good question, and one I cover often on my weekly podcast.

    As a general rule, liquid cash is best. It depreciates and produces no income.

    If you have available equity, as you do, to tap into to generate a rate of return from a portfolio of income producing real estate then that is often a great strategy. Again you need to run the numbers yourself, or with the help of another.

    Many of our clients tap into their HELOC or pull cash from a refinance to use towards down payment on a portfolio that generates more than enough cash flow to cover the expenses and debt service.

    If you live in an expensive market then this strategy can be even more beneficial to you!

    Last but not least, you will have the tax benefits that will apply to your passive income.

    Continued success!

    CC: @Ryan Maguire


    0Reply
  • Brett Johnson
    Member since 2018 · 5 posts · 3 votes
    6y

    thanks @Marco Santarelli, I really enjoy listening to your podcasts as well!  

    0Reply
  • Louimann Francois
    Rental Property Investor · Boston, MA · Member since 2019 · 1 post · 0 votes
    6y

    @Matthew Irish-Jones. Great advice!

    0Reply
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