Anyone still draining savings for down payments?

Question

I’ve been rethinking how I fund deals. Instead of liquidating savings every time, I’m experimenting with keeping capital positioned and letting the property’s cash flow do more of the work.

Bond/note stacking has been a great additional fuel source to the strategy & increases cash flow.

What’s your go-to funding stack right now and what’s worked or broken for you lately?

Nicholas L. · Answer

@Austin Johnson

i'm not getting cash flow on deals right now but I only buy on BRRRR or seller finance

can't shell out giant down payments and wait 20 years to recoup

David Krulac · Answer

We used Section 1031 money sold 1 properties and bought 4 properties just to use up the 1031 property. 3 of the new purchases were with below market financing arranged through the builder. therefore we added NO MONEY to those 3 purchases using 1031 money and had money left over so bought the 4th property. Interest rates 4.25%, 4.25% and 4.75% and all the properties are positive cash flow and rented very quickly. Tenant love brand new houses that they can rent rather than buy,

Etienne Manning · Answer

I definitely understand. Thank you

David Krulac · Answer

@Etienne Manning The rates were 4.25% interest fixed for 10 years then variable for two of the houses and the third was 4.75% interest fixed for 30 years. I recently saw a building advertising 3.85% interest when the market rate now is about 7.5%. so there are deals out there for interest rates much less than what you can get though a bank or other lenders.

Etienne Manning · Answer

Nice . What is below market financing.?

Kenneth Garrett · Answer

I use private lenders to fund my deals and then BRRRR the deal. The lenders also fund the rehab. To put 20% down on each rental is just not a long term strategy as eventually your funds will run out.

To scale, private or hard money or other opm sources are critical to scale. I’ve transitioned to MTR and STR for my projects to get the numbers to work. Finding good BRRRR deals today is a little more challenging, but not impossible.

Alfath Ahmed · Answer

You can fund deals from stocks by leveraging against them, hard-money, private money, IBC life insurance policies. I do all of those.

Anyone still draining savings for down payments?

Anyone still draining savings for down payments?

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