PURCHASING RENTALS WITH NO/LITTLE MONEY DOWN. Doable?
New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes
PURCHASING RENTALS WITH NO/LITTLE MONEY DOWN. Doable?
Most Popular Reply
Owen DashnerPro Member
Lender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votesI came here to say exactly what @Chris Levarek said. Split your time between sourcing properties and private lenders/capital partners. Lots of money out there looking for good projects. Make sure you put together a short presentation or overview the deals you already own as a proof of concept that you can use when talking with potential partners and lenders.
Another option for you is to use hard money into a BRRRR, or a combination of hard money/private money to acquire and rehab deals, then refi into perm financing. Find local hard money lenders at meetups and REIA's in your area. Talk to other investors there about who they use to fund deals.
You could also wholesale/flip some properties to build up cash reserves to allow for more purchases. Flip one, buy a rental. Rinse and repeat - that's how I got started.
Just remember to take consistent, deliberate action toward your goals, whatever they are. Try to sit down for coffee/lunch/beer once a week with someone who is completely new to you in the real estate space.
45 Replies
- Real Estate Agent · Youngtown Ohio · Member since 2019 · 66 posts · 46 votes3y
Are either of the houses your mentioning accepting rto or seller financing. I know there was one in Youngstown for I believe 45 rto with 2500 down. I assume there's not much equity in the other homes to pull out and use?
- 3yManny VasquezBusiness MemberReal Estate Agent · Orange County · Member since 2022 · 317 posts · 293 votes
Do you have equity in any of the 2 properties in Youngstown? You could try pulling a HELOC on one of the properties and use that money to purchase the SFH.
- New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yNone of mentioned rto and I haven’t asked about seller finance because I wouldn’t know how to structure that kind of deal. I’ve only been into investing about 8 months or so
Quote from @William Broxson:
Are either of the houses your mentioning accepting rto or seller financing. I know there was one in Youngstown for I believe 45 rto with 2500 down. I assume there's not much equity in the other homes to pull out and use?
- New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yNo equity yet. I’ve had one duplex for only 7 months and the SFH only 3 months
Quote from @Manny Vasquez:
Do you have equity in any of the 2 properties in Youngstown? You could try pulling a HELOC on one of the properties and use that money to purchase the SFH.
- Rental Property Investor · Youngstown, OH · Member since 2016 · 58 posts · 45 votes3y
You mentioned you're almost strapped for capital and you've already got two properties under your belt. I'd be cautious about biting off more than you can chew if this is your first year investing in rentals, especially in the Youngstown area if you're not highly familiar with the location. Those unplanned for expenses come quick and hard.
- New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yYou’re right. I should prepare for unplanned expenses. I see you’re from that area as well. How do you like it out there? What’s the town like? I need to visit one day just to check up on my properties out there. So far I’ve been ahead of any issues that came up so far
Quote from @Alexa K.:
You mentioned you're almost strapped for capital and you've already got two properties under your belt. I'd be cautious about biting off more than you can chew if this is your first year investing in rentals, especially in the Youngstown area if you're not highly familiar with the location. Those unplanned for expenses come quick and hard.
- Real Estate Syndicator · Phoenix, AZ · Member since 2018 · 903 posts · 1k+ votes3y
@George Duchatelier Now that you have some experience, you can leverage a partnership. Someone just like you but with no experience. You bring the knowledge of what you've done so far and they bring the capital.
A joint-venture.
- New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yThat’sa good idea too. I like that because I’ve been able to pick some winners as far as properties. I got my brother and cousin good cash flowing houses out there.
Quote from @Chris Levarek:
@George Duchatelier Now that you have some experience, you can leverage a partnership. Someone just like you but with no experience. You bring the knowledge of what you've done so far and they bring the capital.
A joint-venture.
I’ll just need to be able to find someone willing to put up the capital - Real Estate Syndicator · Phoenix, AZ · Member since 2018 · 903 posts · 1k+ votes3y
@George Duchatelier just talk about what your doing on the platform or with friends.
My first deal I partnered with a private lender at 10% 12 month prom note on 209k purchase. They funded 70% and had the deed of trust.
- 3yOwen DashnerPro MemberLender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
I came here to say exactly what @Chris Levarek said. Split your time between sourcing properties and private lenders/capital partners. Lots of money out there looking for good projects. Make sure you put together a short presentation or overview the deals you already own as a proof of concept that you can use when talking with potential partners and lenders.
Another option for you is to use hard money into a BRRRR, or a combination of hard money/private money to acquire and rehab deals, then refi into perm financing. Find local hard money lenders at meetups and REIA's in your area. Talk to other investors there about who they use to fund deals.
You could also wholesale/flip some properties to build up cash reserves to allow for more purchases. Flip one, buy a rental. Rinse and repeat - that's how I got started.
Just remember to take consistent, deliberate action toward your goals, whatever they are. Try to sit down for coffee/lunch/beer once a week with someone who is completely new to you in the real estate space. - New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yThe hard money or private lenders don’t want to invest in my properties I choose because the houses I get are priced around 50 to 70k and with prices like that, they aren’t interested. There’s no real money to be made for them.
Quote from @Owen Dashner:
I came here to say exactly what @Chris Levarek said. Split your time between sourcing properties and private lenders/capital partners. Lots of money out there looking for good projects. Make sure you put together a short presentation or overview the deals you already own as a proof of concept that you can use when talking with potential partners and lenders.
Another option for you is to use hard money into a BRRRR, or a combination of hard money/private money to acquire and rehab deals, then refi into perm financing. Find local hard money lenders at meetups and REIA's in your area. Talk to other investors there about who they use to fund deals.
You could also wholesale/flip some properties to build up cash reserves to allow for more purchases. Flip one, buy a rental. Rinse and repeat - that's how I got started.
Just remember to take consistent, deliberate action toward your goals, whatever they are. Try to sit down for coffee/lunch/beer once a week with someone who is completely new to you in the real estate space.
a few hard money lenders told me that. I basically need to do a JV with someone willing to put down average 16 to 24k for down payment and closing costs.
I’ll figure it out. or I’ll just wait until I can buy one off the rent I receive from my tenants or wait until I can refinance both properties - 3yOwen DashnerPro MemberLender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
Quote from @George Duchatelier:
That’sa good idea too. I like that because I’ve been able to pick some winners as far as properties. I got my brother and cousin good cash flowing houses out there.Quote from @Chris Levarek:
@George Duchatelier Now that you have some experience, you can leverage a partnership. Someone just like you but with no experience. You bring the knowledge of what you've done so far and they bring the capital.
A joint-venture.
I’ll just need to be able to find someone willing to put up the capitalWhat if you combine the 2 properties as a package? You might find HML's would be willing to lend on both properties together since the loan volume would be higher. I am a HML in several Midwest states and we have made loans in this exact scenario. I think you just need to talk to more people.
- New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3y
Quote from @Owen Dashner:
Quote from @George Duchatelier:
That’sa good idea too. I like that because I’ve been able to pick some winners as far as properties. I got my brother and cousin good cash flowing houses out there.Quote from @Chris Levarek:
@George Duchatelier Now that you have some experience, you can leverage a partnership. Someone just like you but with no experience. You bring the knowledge of what you've done so far and they bring the capital.
A joint-venture.
I’ll just need to be able to find someone willing to put up the capitalWhat if you combine the 2 properties as a package? You might find HML's would be willing to lend on both properties together since the loan volume would be higher. I am a HML in several Midwest states and we have made loans in this exact scenario. I think you just need to talk to more people.
I was actually thinking about doing that as well. You’re right, I do need to talk to more people. That’s why I figured I’ll give it a shot and post my situation on here to get more insight and possibilities of lanes I can move through.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Owner finance, this is going to be huge in the next few years. People over paid for their property and buyer pool has shrunk. Owner finance terms are completely negotiable and can dictate your rate/down payment/monthly payment etc...
- New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yI’ve been learning about buyer and seller finance. I need to figure out how to structure the right deal correctly
Quote from @Eliott Elias:
Owner finance, this is going to be huge in the next few years. People over paid for their property and buyer pool has shrunk. Owner finance terms are completely negotiable and can dictate your rate/down payment/monthly payment etc...
- Property Manager · Leominster, MA · Member since 2022 · 103 posts · 50 votes3y
@George Duchatelier. Buy with an FHA loan, you will need to owner occupy for at least 2 years.
- New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yI live in fl. I’m not moving to Ohio. My weather is much better lol
Quote from @Olivia Grabka:
@George Duchatelier. Buy with an FHA loan, you will need to owner occupy for at least 2 years.
- New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yI don’t know why you blocked me. But I never got your email
Quote from @Account Closed:
I offer loans,if you need funding for a project.Am here to help
- New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yI tried to respond to you and it said I can’t send messages due to being blocked. It’s so weird! 😩
Quote from @Account Closed:
I did not block you.
- New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3y
Quote from @Account Closed:
I did not block you.
- Rental Property Investor · Youngstown, OH · Member since 2016 · 58 posts · 45 votes3y
Quote from @George Duchatelier:
You’re right. I should prepare for unplanned expenses. I see you’re from that area as well. How do you like it out there? What’s the town like? I need to visit one day just to check up on my properties out there. So far I’ve been ahead of any issues that came up so farQuote from @Alexa K.:
You mentioned you're almost strapped for capital and you've already got two properties under your belt. I'd be cautious about biting off more than you can chew if this is your first year investing in rentals, especially in the Youngstown area if you're not highly familiar with the location. Those unplanned for expenses come quick and hard.
I'm a Youngstown native who spent equal time growing up and living between here and the Tampa Bay area, so I'm comfortable and familiar with both markets, though I'll probably never invest in FL outside of my second home. Youngstown is ideal for investors with less capital to work with, but a good deal of out-of-state investors bite off more than they can chew because Youngstown is a very peculiar area -- one street can have nice houses with decent appraisal prices, while the next street over appraisal prices are in the gutter and your likelihood of being shot is considerably heightened. There's been an influx of out-of-state investors purchasing overpriced houses in less desirable parts (or streets), I'm talking purchasing houses for 45k+ that pass hands between locals for 10-15k. Seen quite a few, even from these forums, end up trying to sell their mistakes months later. So I'm cautious on where to invest and only do so in particular neighborhoods, or on particular streets, because two streets can be the difference between an extra $250/mo, or having to lower rent prices below average in order to get the place occupied. It'd be wise to visit Youngstown for an extended visit to see how the area is, pay attention to the local news and see where most of the crime happens, and definitely pad your savings account for rainy days
I personally prefer to purchase distressed properties for 20-30k in decent parts of town, rehab them, and refinance them to pull all, if not most, of my money out. If you do happen to go the JV route, that might be something to look into with another Youngstown native, as it's probably the best bang for your buck but is certainly time consuming. - New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yI appreciate the info. My realtor out that gives hints on areas where to look at and usually lets me know how the area is which is super helpful. So far I’ve been lucky I guess but only time will tell.
Quote from @Alexa K.:
Quote from @George Duchatelier:
You’re right. I should prepare for unplanned expenses. I see you’re from that area as well. How do you like it out there? What’s the town like? I need to visit one day just to check up on my properties out there. So far I’ve been ahead of any issues that came up so farQuote from @Alexa K.:
You mentioned you're almost strapped for capital and you've already got two properties under your belt. I'd be cautious about biting off more than you can chew if this is your first year investing in rentals, especially in the Youngstown area if you're not highly familiar with the location. Those unplanned for expenses come quick and hard.
I'm a Youngstown native who spent equal time growing up and living between here and the Tampa Bay area, so I'm comfortable and familiar with both markets, though I'll probably never invest in FL outside of my second home. Youngstown is ideal for investors with less capital to work with, but a good deal of out-of-state investors bite off more than they can chew because Youngstown is a very peculiar area -- one street can have nice houses with decent appraisal prices, while the next street over appraisal prices are in the gutter and your likelihood of being shot is considerably heightened. There's been an influx of out-of-state investors purchasing overpriced houses in less desirable parts (or streets), I'm talking purchasing houses for 45k+ that pass hands between locals for 10-15k. Seen quite a few, even from these forums, end up trying to sell their mistakes months later. So I'm cautious on where to invest and only do so in particular neighborhoods, or on particular streets, because two streets can be the difference between an extra $250/mo, or having to lower rent prices below average in order to get the place occupied. It'd be wise to visit Youngstown for an extended visit to see how the area is, pay attention to the local news and see where most of the crime happens, and definitely pad your savings account for rainy days
I personally prefer to purchase distressed properties for 20-30k in decent parts of town, rehab them, and refinance them to pull all, if not most, of my money out. If you do happen to go the JV route, that might be something to look into with another Youngstown native, as it's probably the best bang for your buck but is certainly time consuming.
i definitely plan on visiting Youngstown to look at my houses and area. One of my houses is in Niles. Seems to be pretty good so far. Rent is pretty high for the mortgage I’m paying on it.
I appreciate your input and I don’t understand the whole buying rehabbing and all that yet. Too many numbers and letters and high interest. In order for me to do that, someone has to sit with me and explain it to me with a great deal of patience. I’m in orlando by the way. I wouldn’t buy here either just cause the prices are super high now - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes3y
@George Duchatelier
This is an awful idea in a down market. If you get upside down on the property and have major repairs or property does not perform as expected you are absolutely stuck. You can get out but will kill your credit and set you back years. Over leverage is going to bite a lot of people in the next 2-4 years
7e investments53 Reviews - Investor · Atlanta, GA · Member since 2016 · 627 posts · 374 votes3y
Early on when building my portfolio, I have NEVER left $1 of my own capital in any of my deals. I would wholesale or negotiate a price from a wholesaler low enough to make sure that once I was finished with my rehab that I would be all in less than 80% (usually 70-75%) LTV so when I refinanced, I would completely pay off my Private Money Lender, and sometimes walk away from the closing with a few thousand and actually get paid to buy rentals.
If you use other peoples money, you can for sure then do a rate and term refinance with little to none of your own capital @George Duchatelier - New to Real Estate · OH · Member since 2022 · 53 posts · 26 votes3yI’ve been noticing when it comes to real estate, I just buy and hold. That’s what I’m comfortable with doing as of right now. Everyone seems to buy and flip and whole sale brrr etc.
Quote from @Jesse LeBlanc:
Early on when building my portfolio, I have NEVER left $1 of my own capital in any of my deals. I would wholesale or negotiate a price from a wholesaler low enough to make sure that once I was finished with my rehab that I would be all in less than 80% (usually 70-75%) LTV so when I refinanced, I would completely pay off my Private Money Lender, and sometimes walk away from the closing with a few thousand and actually get paid to buy rentals.
If you use other peoples money, you can for sure then do a rate and term refinance with little to none of your own capital @George Duchatelier
i haven’t studied enough of any of those to try and do them yet. I feel like I will eventually. I’ve been watching a lot of the subto videos and seller financing videos and reading up on that. That’s something I would like to get into as well. I just need to learn how to understand and structure the deal that benefits me and the seller
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