Where do you get the cash for your down payments?

Question

I've bought a few houses this year and am out of my personal cash for down payments. How do you keep the momentum going?

John Warren · Answer

@Andrew Smith every deal I buy helps me buy the next deal. My first property was a four unit in Lyons, that I was able to BRRR right away. The down payment from that, plus the sale of my home (live in flip) in Riverside, helped me buy a nine unit apartment building in Berwyn. From there I bought another fixer upper and then bought a 19 unit in Berwyn. Then a six flat in Cicero with a HELOC. You have to focus on buying value add so that you are always buying equity.

James Wise · Answer

Income man. It's all about generating that income. Rentals won't replace your down payment funds fast enough so you need to replace those funds by making excess income. Whether that is through a 1st, 2nd or 3rd job or side business is up to you.

Alex Deacon · Answer

@Nicole Heasley it always boils down to the numbers and does it make sense. If the margin is great enough it never matters where you get the money from or what interest rate you will pay. The challenge is finding the deals with enough margin.

I see too many investors put creative financing together that doesnt make sense on paper. They over leverage themselves and the deal fails. Just make sure you calculate all holding costs and other variables before doing any creative financing. Also as a rule of thumb you want to pay off those high interest loans as quickly as possible.

Hope this was helpful and answered your question

Jaron Walling · Answer

Never said it better. 100% agree with this statement. If you can't add value I won't buy the property.

Blake Edwards · Answer

@Zoran Stanoev - I agree. The book is excellent as well as the podcast (yes, I am biased) to learn about BRRRR. In my opinion, it may be the right strategy for @Andrew Smith to get some momentum going, and use it going forward.

Jerry Padilla · Answer

@Zoran Stanoev

Has a great suggestion that I see investors do all the time. Also, a HELOC on Primary home is used often, as well as just saving up any income that you can.

@Andrew Smith

Account Closed · Answer

Side business. I have a W-2 as backup.

Kenneth Wiley · Answer

down payment assistance programs

Angelo Mart · Answer

BRRRR STRATEGY!!!!!

Daniel Hyman · Answer

Partnerships. Find a deal and bring it to potential investors. A lot of folks don't have the time or inclination to manage it, but they don't want to be sitting on the sidelines. They have the football and are looking for an Aaron Rodgers to move it downfield.

Where do you get the cash for your down payments?

Where do you get the cash for your down payments?

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