Acquiring a property with OPM

6 Replies

Hello

My partner and I are acquiring our first multifamily property in Rhode Island area in 2015, and I have some questions about funding. Please bare with me if I am asking stupid newbie questions. 

If our goal is to fund our first investment with OPM or no money down if there is a such thing!, 

Questions:

1. How do we find investors, and how do we prepare ourselves with the skills and tools needed to secure funding?

2. What do investors look for when partnering?.

3. What is hard money lender?, and is it safe for newbies?.

4. How do we prepare ourselves enough and not get burned, since some people prey on newbie?. 

5. How do we protect ourselves and the investors money?

6. is there any links or book or club we can join or read to better understand financing or funding resources?. 

The catch-22 of this process is that you need money to start.  To get money you need experience.  You need to figure out a way to build cash to start.

Investors have choices.  Successful investors know how to place their money.  They tend to go with track record.  Friends and family might be an option if they see something in you.

In order to get hard money, you will need to secure a great deal.  In 99.999% of the cases you will still need to have money down.

There are a couple of items in your questions that come through as a victim mentality.  Anyone in business can be taken advantage of.  That is the nature of business. You are doing the right thing by asking questions and studying up.  Inexperience can lead to mistakes.  Mistakes are learning opportunities.  But the world is a tougher place to live if you are worried about being preyed upon.  Go out with confidence.  Take your bumps and learn from them.

@benleybovich  I will read this, wonder if I can get in touch with you to discuss this topic further.?.

@Steve Olafson   You made great points, Cant have something for noting. And yes I want to learn as much as I can about this, and I am in the right place for it. 

Originally posted by @Abou C. :

Questions:

1. How do we find investors, and how do we prepare ourselves with the skills and tools needed to secure funding?

In my experience investors come to you once you have enough experience.  I have 12 years of experience so if I find a deal I can pick up the phone and call one of many investors however this is not something you will have the luxury of on your first deal and to be honest with you it is not really something you need.

Rather than finding a deal than finding funding your best bet is to do a few wholesale deals (get a contract and sell the contract before closing) this will not require you to have... much money (normally need $500 minimum for this strategy).  Once you have a few of these under your belt you will have a little more capital and a growing network of buyers and potential lenders for a long term hold.

2. What do investors look for when partnering?.

Opportunity, if the numbers work the deal will work for the investor.  When I look at a deal I always come up with three exit strategies so if one strategy does not work I can fall back on either of the other two.

@Abou C.  

Welcome. You have received some great advice. Take a good look at student housing. Time to build the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 90 past ones to catch up on.

Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need. RI has a great one say Hi to my buddies Craig and Don.

Consider checking out HUD homes for small multi's owner occupied gets first crack.

You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good luck

Paul

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