Creative financing tips?

7 Replies

It is advice you will find in a lot of posts (because I think it's good advice) - find a small multifamily (or a large single family) and househack it. It is how I started - buying the cheapest house on the market at the time and using a 203k to rehab it and then rent out the other unit. If done right - or close to right - the savings on your living expenses and the mortgage paydown will put you on a good path and provide the landlord and handyman experience you will need.

@Joel Calkins kudos to you for already thinking of how to purchase a home. 

You are still so young and likely have zero credit. Rather than focusing on buying a home have you thought of taking advantage of renting a room from a house hacker? Not sure what your living situation or employment situation is but if you rent a room you could set a goal to save save save and raise the capital yourself for a down payment in 1-2 years. Then turn around and house hack to lower your own expenses. 

Best of luck to you!  

I am in your exact same shoes and figuring it out as I go.

Creative finance is your best bet to get into the game, but it wont be easy and you will need some type of access to capital. There are a ton of landlords out there who hate their life and would love for someone to take the deal off of their hands. However, you have to know how to approach the owner finance pitch from the right angle because many investors just want to cash out and don't want to deal with the payments, especially when it is coming from an 18 year old. Pitching owner finance is an art and you have to be able to explain it effectively. 

You could also try to find a co signer to sign on to a mortgage (parents, older siblings, familty friend), but you will have to offer them something in return to reward them for their risk.

It will be hard to get in to an investment property at such a young age but not impossible. Anything is possible for those who are willing to hustle.

Feel free to message me if you have any other questions. I am always down to talk some RE.

-BA

Stack your money. Time is on your side. What are you currently doing for work? I just listened to the latest BP episode and the guest worked for other real estate investors, learning the ropes, while saving money to be able to do his first deals. This could be a great route if you are passionate about real estate. You'll basically be able to practice dong deals with none of your money while getting paid!

There's also a bunch who have received the capital from family, via the equity on their parent's homes or retirement accounts (kinda scary territory there, but it's been done). I have cousins whose parents provided the down payments on their properties.

Then there's also partnering up with an investor, where you bring in the sweat equity and they provide the financial equity.

There are many ways, but either way you go, LEARN the game. Have you learned to analyze deals? Do you know what you are looking for? What market are you going into, etc. 



Partnerships Partnerships Partnerships

Find a good deal thats cost $0 just your time. 

Then go to your local REI find a flipper and present him the deal and either wholesale it to him or be like a 5-20% partner on the deal. He puts up all the money, renovates it all you do is find the deal.

Originally posted by @Petronilo Rosel :

Stack your money. Time is on your side. What are you currently doing for work? I just listened to the latest BP episode and the guest worked for other real estate investors, learning the ropes, while saving money to be able to do his first deals. This could be a great route if you are passionate about real estate. You'll basically be able to practice dong deals with none of your money while getting paid!

There's also a bunch who have received the capital from family, via the equity on their parent's homes or retirement accounts (kinda scary territory there, but it's been done). I have cousins whose parents provided the down payments on their properties. 

Then there's also partnering up with an investor, where you bring in the sweat equity and they provide the financial equity.

There are many ways, but either way you go, LEARN the game. Have you learned to analyze deals? Do you know what you are looking for? What market are you going into, etc. 


Thanks Petronilo,

Currently I work part time at a golf course while attending University and I am transitioning to becoming a buyers agent in Michigan. I've discussed with family/friends about HELOCs and private money to no avail. I'm always looking for partnerships and business relationship in the SE Michigan area!

 

Hey Joel, I second what Blaine said, Creative Financing is the best bet to get into the game for sure since it is like acquiring a utility belt to fix problems. You do not need access to capitol at first, as long as you are creative and open-minded. Anything you pay for can be outsourced, I would start off by looking up Pace Morby.