Coming up with down payment money at the beginning

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Coming up with down payment money at the beginning

Brendan VanDalinda
Rental Property Investor · Jacksonville, NC · Member since 2020 · 9 posts · 4 votes

I’m pretty new and am struggling figuring out good ways to come up with the money for a down payment! Any ideas?

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Andrew Powers
Investor · Cincinnati, OH · Member since 2018 · 304 posts · 185 votes
5y

Do you have anything you can sell? Sell an expensive car and buy a cheaper one? Equity in a property you have? Work overtime? Get a better paying job? Flip things on FB and Craigslist? Gamble? Borrow from a family member? Hard money loan? Bank LOC? Use a low down payment loan?

I'm spitting out random ideas.... it's much more helpful if you can give background to the amount you need, what dp% you are going for, what assets you have

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  • Andrew Powers
    Investor · Cincinnati, OH · Member since 2018 · 304 posts · 185 votes
    5y

    Do you have anything you can sell? Sell an expensive car and buy a cheaper one? Equity in a property you have? Work overtime? Get a better paying job? Flip things on FB and Craigslist? Gamble? Borrow from a family member? Hard money loan? Bank LOC? Use a low down payment loan?

    I'm spitting out random ideas.... it's much more helpful if you can give background to the amount you need, what dp% you are going for, what assets you have

    9Reply
  • Joe Aiola
    Real Estate Agent · Fleetwood, NY · Member since 2018 · 264 posts · 235 votes
    5y

    @Brendan VanDalinda great question. As @Andrew Powers mentioned, there are a ton of options. I would recommend looking at your expenses first and seeing where you can save. Most of the time, the two biggest expenses are your housing and your car. Can you get yourself into a cheaper car? Can you decrease your living expenses by renting a place with a few buddies? Definitely can get creative here.

    Then you can work your way to minor expenses, such as Netflix or Amazon Prime accounts. Determine what's necessary for you and what is just a liability. 

    I'm sure you've heard the saying - "it's not how much you make, but how much you keep." So, once you're saving as much as a you can, then you can focus on making more. 

    Hope this helps - best of luck!

    8Reply
  • Antonio CuccinielloPro Member
    Investor · Austin, TX · Member since 2016 · 531 posts · 310 votes
    5y

    @Brendan VanDalinda What have you tried to do?

    Do you have a main source of income? This is the easiest but longest way

    Do you have friends that are interested in real estate that have money but don't have time or knowledge on how to invest? Then you could partner?

    Have you tried to do house hack with minimal money down?

    732-402-6988
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  • Andrew Powers
    Investor · Cincinnati, OH · Member since 2018 · 304 posts · 185 votes
    5y
    Originally posted by @Joe Aiola:

    @Brendan VanDalinda great question. As @Andrew Powers mentioned, there are a ton of options. I would recommend looking at your expenses first and seeing where you can save. Most of the time, the two biggest expenses are your housing and your car. Can you get yourself into a cheaper car? Can you decrease your living expenses by renting a place with a few buddies? Definitely can get creative here.

    Then you can work your way to minor expenses, such as Netflix or Amazon Prime accounts. Determine what's necessary for you and what is just a liability. 

    I'm sure you've heard the saying - "it's not how much you make, but how much you keep." So, once you're saving as much as a you can, then you can focus on making more. 

    Hope this helps - best of luck!

     I agree. Calculate your debt and make a plan for how to eliminate/reduce. Calculate your current monthly expenses, see what can be eliminated or reduced, calculate your new monthly number, and plan how to achieve. 

    0Reply
  • Brendan VanDalinda
    OP
    Rental Property Investor · Jacksonville, NC · Member since 2020 · 9 posts · 4 votes
    5y

    @Antonio Cucciniello and the others, thank you all for responding! I’m currently an active duty Marine so I don’t make much per year, but I’m already a home owner, using my va home loan to purchase my first house (house hacking) I have a cheap car and not really much else besides the house I’m thinking of getting another property for an investment property (around 200k) but the down payment thing is insane.

    2Reply
  • Antonio CuccinielloPro Member
    Investor · Austin, TX · Member since 2016 · 531 posts · 310 votes
    5y

    @Brendan VanDalinda Do you have friends that are interested in real estate that have money but don't have time or knowledge on how to invest? Then you could partner?

    732-402-6988
    1Reply
  • Jon KellyPro Member
    Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
    5y

    @Brendan VanDalinda The easiest ways to get started in real estate with little or no money are: 

    1. start wholesaling (or become an agent) 

    2. house hack - if you live in the property you may qualify for a 5% down payment. 

    3. Partner with a local investor and find ways to add value without contributing capital (e.g. repairs, collect rent, analyze deals, research new markets, take pictures of properties, etc...) 

    3Reply
  • Jacob Lapp
    Rental Property Investor · Souderton, PA · Member since 2020 · 124 posts · 106 votes
    5y

    @Brendan VanDalinda

    I have been looking for a friend who is struggling with the same thing. You are able to use an FHA loan if you already have a VA loan. You just need to claim residency for a year. So 3.5% down plus closing cost. That will probably be your cheapest option. If you are struggling with funds for that..

    Look into NCHFA I’m not sure your states requirements to be eligible for this but its designed as an interest free loan for part of the down payment. PA is up to 6k of down payment money.

    And then if you are still looking for extra income. Consider a low overhead business. I started with gutter cleaning. You can make around $100 per small house and if you only have a few hours a night you can do 2 or 3. All you need is a ladder and they are easy to find for cheap on facebook marketplace. Thats what I did but theres plenty of opportunities to make money on the side if youre handy! Good luck

    1Reply
  • Aaron W.
    Rental Property Investor · Northern Virginia · Member since 2019 · 793 posts · 620 votes
    5y

    @Brendan VanDalinda Lack of funds is one of the solvable barriers to entering into real estate.  If you have a truly good deal and being a newer investor, partnering with others on the deal will provide you the funds you need while also having someone that can potentially mentor you through the process. Even if you have to give up some or most of your deal, the knowledge gained is priceless and could fast track you through to buying even more properties.  

    As mentioned previously, there are many sources to find funding for your deals. Finding an experienced investor with some cash to bring to your deal may be a great combination.

    Good luck!

    2Reply
  • Brendan VanDalinda
    OP
    Rental Property Investor · Jacksonville, NC · Member since 2020 · 9 posts · 4 votes
    5y

    @Jacob Lapp thank you for your feedback! I’m going to shoot you a dm so we can talk some more if you don’t mind!

    1Reply
  • Mike Chevalier
    Rochester, NY · Member since 2017 · 23 posts · 17 votes
    5y

    @Brendan VanDalinda thank you for your service. I would point you towards David Pere AKA @frommilitarytomillionaire on Instagram and Youtube. He posts a lot of value, and much of it is targeted to our Service Men and Women and answers this question.

    1Reply
  • David Pere
    Rental Property Investor · Springfield, MO · Member since 2016 · 1k+ posts · 890 votes
    5y

    @Mike Chevalier Thanks for the shoutout brother, I really appreciate that!

    @Brendan VanDalinda happy to chat with a fellow Marine anytime if I can help!

    1Reply
  • Cole Britting
    Investor · NH · Member since 2020 · 175 posts · 75 votes
    5y

    The two best options in my opinion are finding someone to partner with or saving as much as you can (or both). With the first route, you will have to bring something to the table if it is not the bulk of the capital. That can be hustle, managing the tenants, or anything you can think of. For the second, you are going to have to make some sacrifices in your life. Maybe that's selling your car and buying a bike, or maybe it is rarely eating out. 

    The second one in my opinion is the best. You can always try to make more money, but that will get taxed so you have to earn at an even higher clip. With saving, you don't get taxed on what you can save! It may be hard at first, but you get used to it and it becomes a way of life.

    Best of luck!

    0Reply
  • Kuron McGraw
    Wholesaler · Newark, NJ · Member since 2018 · 30 posts · 8 votes
    5y

    @Brendan VanDalinda Hey Brendan check with local lenders for down payment assistance loans or programs.

    0Reply
  • Ken NyczajPro Member
    Investor · Grasonville, MD · Member since 2017 · 453 posts · 415 votes
    5y

    Have a seller contribution addendum so the seller pays most of the closings costs and all you have is the down payment. With VA, FHA, or USDA, you may be able to get into a property with 0%-3% down.

    1Reply
  • Guido Nunez
    Investor · Los Angeles, CA · Member since 2019 · 38 posts · 22 votes
    5y

    @Brendan VanDalinda network with investors and build a list of their goals/expectations. Find a deal and partner with them on the deal. They will fund it if the deals makes sense.

    0Reply
  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    5y

    If its an owner-occupied purchase, look for government grants/assistance. Illinois has various ones that can get you up to $10k for down payment and closing costs. With a 3% credit from the seller you can come in with very little $, I think the gov't programs only require a minimum of $1k out of your pocket.

    2Reply
  • Isabel Beteta
    Wilmington, NC · Member since 2020 · 4 posts · 2 votes
    5y

    @Brendan VanDalinda I’m in a similar situation with starting out and raising money for a down payment, and personally, I’ve found furniture and home item resale is my most effective ways to get chunks of cash at a time. When I see items on the side of the road that I know I could resell for at least $10, I load it up in my car to take home. I clean it up, take pics, post to Facebook marketplace, and try to sell in under a week so I can make room for more items to sell. I’ve raised a couple thousand dollars over the last year just reselling free or cheap items I found on curbs, yard sales, and thrift stores. It definitely takes some time and effort to find and list items like this, and depending on where you live, weather or city rules may limit what can be found curbside. However, just going on Facebook market place and searching “free,” you can find some goodies from people moving out or people who just don’t have time to take things to the local donation center. Highly recommend!

    1Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    5y

    Since you're military, and I'm ex-military, let me tell you a story. 

    When I got to boot camp (not sure if they do this any more), they gave us a "chit" book. Paper coupons with increments wrote on them - $5, $1, $10, etc. This was an advance against our pay (I made $400/month when I went in). You had to buy all your own shaving cream, toothpaste, etc. with these chits. They took all your cash when you went in so no one could gamble. You got to go to the "C" store once a week and buy your stuff with these chits, and you got cash back on the difference of what you bought. If/when you got up to $24 they made you get a money order and send it home. You weren't allowed to buy anything that was "contraband", which was pretty much anything that wasn't toothpaste or shaving cream.

    I was in the Navy choir (yeah, I could sing pretty good back then 😃 ). Because of that I got to go to the "C" store on my own. Pretty soon guys in my company realized that I could get things at the store (contraband) because I was separated from the rest of the company. Pretty soon these same guys were giving me $5 paper chits for a bag of 50 cent Doritos. They never got the connection that these paper chits were money and you would cash out at the end, nor did they care - they couldn't bear sacrificing another day if they could have a $5 bag of 50 cent Doritos today. So I ran my little smuggling business, paid $5 chits for 50 cent Doritos, and stashed all the cash in a big manila envelope that I wrote my mother's name and address on (they weren't allowed to look at your mail). When I left boot camp I had almost my entire chit book left and over $1000 in cash in a big manila envelope 😂 . 

    Now, here I wish the story had a happier ending, in that I used that for the first down payment on a house hack. No, I bought a first class ticket home after BC and pissed the rest of the money away drinking and cavorting for 2 weeks. But that's not the moral of the story here, which is: opportunity is where you find it. If you want a down payment bad enough you'll eat Ramen Noodles instead of steak. You'll take in a roommate or two from your company, guys who are desperate to get out of the barracks (that's what one of my shop buddies did, only I was the paying roommate instead of the guy making the money). You'll figure out a side hustle. ETC. 

    You're a Marine. You didn't get picked for your good looks. These days I like hiring veterans (good ones) because they know how to get things done and how to figure it out. There's no guide book here. Your path can be anything you want it to be. If you want to eat steak, get a good side hustle. Sell the house and buy a duplex. ETC. I had a lady in my office once made several thousand dollars over the course of a year selling used clothes she would buy in Goodwill and sell over Ebay and Etsy. She had to get good at identifying good clothes, but what a hustle she had. 

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  • Matt Nico
    Member since 2019 · 448 posts · 306 votes
    5y

    @Brendan VanDalinda

    Refi the VA loan you have into a conventional and then go get another VA loan.

    5Reply
  • Arta Montero
    Member since 2019 · 182 posts · 45 votes
    5y

    @Brendan VanDalinda save as much as possible. I know it can take time. I started going grocery shopping only once every two weeks and has helped reduced grocery Bill by quite a bit. I use to run to store as soon as I run out and really adds up. I have also started to ask or sit on most things before I buy and really ask if I need it. Easier said than done.

    0Reply
  • James Ma
    Burnaby, BC · Member since 2017 · 282 posts · 268 votes
    5y

    Hard money lending, borrowing from friends and family, or finding a partner on the deals would probably be your easiest routes. Working a second job if possible can help too depending how much you're requiring

    0Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    5y

    Pursue a side job/hustle in something real estate related. You can make money to save and learn the business at the same time. 

    0Reply
  • Igoni Igoni
    Member since 2011 · 7 posts · 1 vote
    5y

    @Andrew Powers

    Your points are spot oh. Great ideas

    0Reply
  • Nate Sanow
    I​nvestor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    @Brendan VanDalinda

    If I could turn back time I would’ve stopped worrying about down payments and focused on recycling capital through brrrr. I’d encourage you to do so early in your investing. Best wishes!

    1Reply
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