Hard Money Lenders hard to come by... Creative funding options???

24 Replies

As a beginner without the financial support of "family or friends" (F&F), I've noticed many investors and gurus make the suggestion of using family and friends while watching a webinar, youtube video or listening to a podcast.  Unfortunately,  everyone does not have the financial support of "friends or family"  they can borrow thousands of dollars from for a down payment,  some people are literally on their own...

Can anyone suggest some creative alternatives for beginner investors who want to dive in but do not have the financial support of "family and friends" and HML's are hard to come by.

( @KasanKelley just thought I would tag you just in case any alternatives were provided )

@Lateeka Mosley I'm in a similar situation to you little to no money of my own and no family or friends that can help. I have contact info for several HML. Some of them operate in all 50 states others are here in Colorado. Send me a DM if you want details.

I think what you are looking for are information on doing deals with equity partners or wholesaling.  Those are the two best options for you if you do not have any cash up front.  '

I personally think that getting an equity partner is a little easier than doing wholesaling. 

If you have any questions please tag me so I can answer.

Originally posted by @Michele B. :

I think what you are looking for are information on doing deals with equity partners or wholesaling.  Those are the two best options for you if you do not have any cash up front.  '

I personally think that getting an equity partner is a little easier than doing wholesaling. 

If you have any questions please tag me so I can answer.

 Is an equity partner similar to private lenders?  

@Lateeka Mosley Good question and I am sure there are a lot of people in your same situation.  Money is only one component of value.  If you don't have money, but have time, knowledge, or a deal you have something of value.

If you can pair the value you bring with someone who has money, but is missing the piece you have, you may be able to partner on something.

Are you looking to invest in NYC?  

Originally posted by @Lateeka Mosley:
Originally posted by @Michele B.:

I think what you are looking for are information on doing deals with equity partners or wholesaling.  Those are the two best options for you if you do not have any cash up front.  '

I personally think that getting an equity partner is a little easier than doing wholesaling. 

If you have any questions please tag me so I can answer.

 Is an equity partner similar to private lenders?  

 NO not even close.  Equity partner is someone who fronts the money on a deal you have they are risking much so usually you get a small piece of the action. 

@Lateeka Mosley  Owner financing can always be a good option to get your foot in the door.  It was one of my first deals, buying a place for $80k and putting down 10%, so about $9500 total with closing costs.  I then renovated the place using a combination of credit cards or asking for delayed payments from the contractors.  I finished the job in 3 months and refinanced it, pulling out about $40k.  

I then had money for the next deal....

It can be done - good luck!

- Tom

Originally posted by @Account Closed :

@Lateeka Mosley Good question and I am sure there are a lot of people in your same situation.  Money is only one component of value.  If you don't have money, but have time, knowledge, or a deal you have something of value.

If you can pair the value you bring with someone who has money, but is missing the piece you have, you may be able to partner on something.

Are you looking to invest in NYC?  

 Russel,  I would love to invest in Brooklyn; however considering it's so pricey these days I'm a bit reluctant to make my first deal there.  I have the time and have been educating myself non-stop to the point of obsession with bigger pockets podcasts, webinars, youtube and Grant Cardone podcasts and youtube videos.  I just need to find a partner who can fund my deals.  My background is finance and I am a bank regulator for the government, so I have much to offer. 

@Lateeka Mosley Brooklyn is a tough place to find a deal, perhaps that is your value opportunity.  Since you know the area well, if you have a real deal you should be able to assign the contract and collect a commission, or partner on the deal with someone who has the capital and is looking for a deal in the area.  

Are you talking to people to look for an off-market deal, or are you working with agents/brokers in the area? 

Account Closed both offered very valuable information right now with two options for your next move. Real estate although alluring with it's profit potential can be dangerous when not executed correctly. Do some wholesale deals where your in and out that way you build some capital all while finding an equity partner that has capital but no time. Remember that old saying "seek and ye shall find"

If you have a great deal and you need an equity partner there are ways to find them......you just have to remember you have to pay them back in 1-5 years plus pay the mortgage.

@Tom S. This sounds like something I would like to do. Hopefully I can find a deal where the owner is willing to work out a deal such as this, I haven’t seen to many owner financing however I am looking at properties in NY, CT, FL, NJ, and a few states in between.

@Lateeka Mosley Use that finance background to your advantage! If you analyze a few deals for properties in the $200k-$250k range, that show the numbers investors want to see, you will have no problem finding a private lender to partner with. There are a LOT of private lenders, who are looking for passive income investments. And if you can't find any, let me know. I met quite a few at the last AZREI meeting in Phoenix. The interest rate they offer may be a bit higher, but it is definitely possible. One of my clients just signed a contract for $30k from a private lender, to be used to purchase a 2 bed/1 bath home in Phoenix that was priced at $215k. Interest rate was 14%. If you're willing to extend your reach to Phoenix or Atlanta, let me know.

I don't work in NY, but I'd look at attending local REI meetups and of course utilizing BiggerPockets. With your Pro membership, you can search for members by location and specific criteria, i.e. private lenders. Feel free to PM me with any other questions. I'm happy to help!

Originally posted by @Tom S. :

@Lateeka Mosley  Owner financing can always be a good option to get your foot in the door.  It was one of my first deals, buying a place for $80k and putting down 10%, so about $9500 total with closing costs.  I then renovated the place using a combination of credit cards or asking for delayed payments from the contractors.  I finished the job in 3 months and refinanced it, pulling out about $40k.  

I then had money for the next deal....

It can be done - good luck!

- Tom

 10k and good credit and willing subcontractors  nice work !

@Lateeka This is all good information. I think a househack would be one of the best ways to get your feet wet in RE. Especially if you know your way around some power tools. The finance background is definitely a good look as well! Thats awesome! 

I actually think HMLs are easier to find now than in awhile. They are everywhere advertising here, on the radio, etc. Have you reached out to them and they are denying you?

Originally posted by @Kasan Kelley :

@Lateeka This is all good information. I think a househack would be one of the best ways to get your feet wet in RE. Especially if you know your way around some power tools. The finance background is definitely a good look as well! Thats awesome! 

 thank you Kasan,  I would love to do a house hack, the challenge is finding a property that is less than $1MM in Brooklyn.  We shall see.  

Originally posted by @Odie Ayaga :

I actually think HMLs are easier to find now than in awhile. They are everywhere advertising here, on the radio, etc. Have you reached out to them and they are denying you?

I was just inquiring for myself and those others on the forum with similar circumstances. Since posting this I have compiled a nice list of HML's.

Thank you 

Originally posted by @Tom S. :

@Lateeka Mosley  Owner financing can always be a good option to get your foot in the door.  It was one of my first deals, buying a place for $80k and putting down 10%, so about $9500 total with closing costs.  I then renovated the place using a combination of credit cards or asking for delayed payments from the contractors.  I finished the job in 3 months and refinanced it, pulling out about $40k.  

I then had money for the next deal....

It can be done - good luck!

- Tom

 I am going to research owner financing a bit more, I am familiar with the term however I would like to have a great understanding of how it actually works.  

Thank you Tom