Finding and funding my first deal

Investor · FL · Member since 2020 · 24 posts · 4 votes

People over and over as a investor ask how you find your first deal and how you manage to get your investment funded? And what are the steps on closing the deal.

- For looking for deals below:

1. Do you drive around ?

2. Find a agent ?

3. Go on certain listing websites?

- Getting your investment funded:

1. Do you have an investment group ?

2. A private lender

3. Hard money

- Closing your deal

1. Do you have an business to contract the transaction? Like An LLC etc

2. Do you make the broker or agent do all the work and your just the middle man investor. lol

3. Or do you have a website where you obtain contracts and put the property under contract ?

If you have any suggestions on how you started out and would like to share . Please feel free . Your experience would help a lot of people who have the same question as I do.

0 Reply

17 views

3 Replies

Jump to latestLatest

Sort by

Dan M.
Real Estate Investor · Unadilla NY · Member since 2017 · 418 posts · 297 votes
6y
1) Any of these strategies is a good idea. Personally I use normal websites like Realtor.com run an analysis and decide at what price I could buy where it makes sense to both the seller and myself to make the deal happen. If you want "steal deals" you could employee a number of tactics but this will definitely be slower than traditional purchases. My personal stance is if its a deal that cash flows hitting a single is better than never swinging and getting the home run.
2) I've done a number of things that some people do not think about. One huge way that people do not think about is taking a 401k loan. After you refinance it if you choose to do so you can pay it right back. Alot cheaper than hard money in the long run. I've used hard money, credit cards, eating ramen for a year. Its whatever your comfortable doing to get the ball rolling.
3) All of my properties are in a number of LLC's. You pay extra for everything this way and noone wants to ever talk about it, higher interest rates, miscellaneous fees for closings, more headaches at the closing table, a higher tax return but you also get that liability shield ( in theory ) if god forbid something happens. Theres nothing wrong with putting it in your own name to save money I think in the beginning especially if your planning to house hack and use it as a primary residence and live there for a while. I think any "institutional" investor would say to create the liability shield but if its your first deal likely your not protecting billions of assets the choice is yours what you think is appropriate. If I could go back in time, of course knowing that nothing happened with my first few deals, I would have had them in my own name.
3a) Theres alot of what I'll call nonsense you have to deal with regardless if you use a realtor to close the home. The bank is going that you personally get alot of work done for them and you pay for it all, unless your paying cash. Realtors are going to have to do what they have to do for their own work which also requires you to review and sign things regardless. If I were you on your first few deals be as involved as possible to learn as much as possible. Kick back and sip Caronas on a beach once your retired and financially independent your first few are going to be work but it gets easier.
Hope this helps/ gives you some insight. Anyone will say thats made it will say just take action and do it even if you lose you gain valuable insight and find out if real estate is for you.
1 Reply
Richard Forbes
OP
Investor · FL · Member since 2020 · 24 posts · 4 votes
6y
@Dan M. Awww man, it does not get no better than this. For any of my beginner reading this . This is a very good tip and I want to thank you for giving your feedback. We need more experts to speak up like this and stop doing courses where people are not learning nothing . They drag out the classes and leave out important details. Certain people leave still confused and still don’t know where to start . I
Applause the ones who took their time on going out there and learn off mistakes.
1 Reply
George Blower
Retirement Accounts Attorney · Southfield, MI · Member since 2017 · 3k+ posts · 1k+ votes
6y
@Richard Forbes
Here are the general considerations regarding 401k loans.

401k Participant Loans
- If your 401k plan allows for 401k participant loans, the maximum loan amount is equal to 50% of the balance up to $50k. The repayment terms for a 401k participant loan are equal monthly/quarterly payments of principal and interest (typically prime plus 1%) over a 5 year term (longer if used to acquire your principal residence).
- Please note that if you take a full $50,000 and then pay back the loan, you can't take another $50,000 until 12 months after the first loan was fully paid back.
- Per the loan offset rules that went into effect with the 2018 Tax and Job Act: if you leave your job and the loan is current at the time you leave your job but then the loan goes into default because you left your job, you will have until your tax return deadline (including any timely filed extension) to make the loan current by depositing the outstanding balance into an IRA (and thereby avoid the taxes and penalties that would otherwise apply).
Please keep in mind the multiple loan rules:

Under those rules, the sum of the balances of a participant's outstanding 401k loans under a single 401k plan (using the highest outstanding balance of each loan over the last 12 months) can't exceed 50% or $50,000 whichever is less. Thus, if you took a $50,000 loan and paid it back within 6 months, you would need to wait another 6 months before you could take another $50,000 loan.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.