Top Financing Option for Beginner Investors
Dear BP Members,
I'm new to BP, and although I work in the investment world full-time, REI is new territory for me. For those who've found success in REI, please describe your first financing deal? Also, what is your go-to financing option in today's marketplace?
Your insight is greatly appreciated!
JP
Most Popular Reply
Welcome to BP, JP!
I financed my first deal by getting a finance company loan, and having the seller carry back a second. I was in for nothing down. That's a little harder to do these days for a variety of reasons.
On my second deal, I bought the property subject to the existing financing, which was in default. I used a cash advance from credit cards to reinstate the loan, and used credit cards to finance the rehab.
On later deals, I used a wraparound mortgage (actually an all-inclusive deed of trust) or private money from a hard money broker coupled with credit card advances, signature lines of credit, and later an equity line of credit to bridge the financing gap.
All of that helped me build a track record that allowed me to do the next several hundred deals pretty much the same way: using equity raised from wealthy investors desiring passive income from alternative investments, coupled with either bank debt or private money lenders (at much better terms than when I started).
Good luck!