Flat Broke and No Funds...What to do???

Private Lending & Conventional Mortgage Advice

Flat Broke and No Funds...What to do???

Investor · Walnut Creek, CA · Member since 2018 · 43 posts · 27 votes

Hi Everyone,

Happy Friday first of all!! I recently got divorced and am up to my eyeballs in debt and my credit score has taken a hit (once a gleaming 750, now a less then great 640ish).

I am highly motivated and already have direct mail campaigns for multi-family apartments in the mail for the Sacramento area. I am also hunting down deals for self-storage properties.

My problem is $$$ money! :( I am employped full time and make almost $100k a year. However, as I said the "big D" has left me in debt up to my eye balls!

I have reached out to lenders for a mortgage who basically laugh in my face because I have no funds. How does one get started without funds??? Where can I get funds??? (and no I don't have friends or family with deep pockets).

Thanks in advance!!

7 Reply

139 views

Most Popular Reply

Arlen Chou

Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes

@Jason S. if you don't have a support structure to tap into... the unhappy answer is that there is no short cut. You have to invest the time and effort to rebuild it all back up. Get a side gig for extra cash flow, stop all extra spending and live like a monk. At the same time get out to REI meet ups and get your name and face out there. See if you can bring value to somebody that will be willing to bring you in on a deal. It personally took me decades to build up the financial base to get going, but once I did I was able to start making some serious progress on wealth building. Sorry I was not able to give you a silver bullet for your problems, but this is the reality of the situation.

23 Reply

See this reply in the discussion

68 Replies

Jump to latestLatest

Sort by

Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
8y
Originally posted by @David J.:

The wholesale thing isn't going to get you a long term MF or storage unit. What it can do is possibly generate some quick cash to help you pay down debt and build for a down payment.
I would send a PM to the person who said that and ask them
0 Reply
Jason S.
OP
Investor · Walnut Creek, CA · Member since 2018 · 43 posts · 27 votes
8y
@Dave Skow - Hi Dave. I tried applying for various (commercial and residential) real estate loans. No, I don't own a home, I rent.
0 Reply
Pratik P.
Flipper/Rehabber · Sacramento, CA · Member since 2016 · 807 posts · 815 votes
8y
@Jason S. I guess I'm one of the few who believe if you find a good deal, the money will follow. At least in my niche of wholesaling/flipping. That's how I got my first deal. I found a killer deal, put 1k down as EMD and then wholesaled it for a nice profit.
If you find a good 1-4 unit deal with good numbers, people will partner with you and bring the funds. In fact, if you find something in Sac that looks good, reach out to me please.....
Your credit isn't great but it's not bad either. You'd qualify for a hard money loan if you have a solid deal and a partner with experience.
4 Reply
Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
8y
"How does one get started without funds???"
You can not and should not be thinking about investing in real estate. With a income of 100K you should be back on your feet quickly, assuming you understand how to live a frugal lifestyle and be investing in less than 5 years.
Pay off all your debts, save money by living a super frugal lifestyle and rebuild your credit. Investing in your position is a laughable idea. As your banks have made very clear.
Getting a second job would be financially more productive and less work than wholesaling.
13 Reply
Roshan K.Pro Member
Oklahoma City, OK · Member since 2017 · 258 posts · 215 votes
8y
While you may not have wanted this thread to turn into how to pay down debt, I believe that's what it should turn into. The good people here at BP have realized something that it seems you are trying to avoid or circumvent. Get to zero personal or CC debt first. Then you can start saving for deals. If you feel like you are scraping by, you might need to downsize the apartment, go out less, eat out less, cook more, etc. Downsizing the apartment and living in a roommate situation can help significantly while you're trying to dust off and pick up again.
4 Reply
Jason S.
OP
Investor · Walnut Creek, CA · Member since 2018 · 43 posts · 27 votes
8y
Hi all, Again, I appreciate the concern for my personal lifestyle. However no one here knows how I live. For all you know I could live in a cardboard box. This forum is about loans or creative financing to get your first deal. Thank you.
2 Reply
Henry LiChi
Developer · Long Beach, CA · Member since 2016 · 109 posts · 75 votes
8y
Jason S. It must be so frustrating to receive advice over and over again about being frugal and paying off debt when it wasn’t what you were asking for. Most people on here are just planning accordingly long term but looks like you’re trying to fast track yourself out of this debt and get back on your feet. Despite making six figures and I do as well, supporting a family and living in the Bay Area quickly drains that. My advice is to attend as much meet ups as possible to network. It is no cost to you but a few hours a week. There is always a good one in SF that has many prestigious investors. There’s no way you will do this alone. You’ll need to partner with someone and if you don’t have the cash, expect to put the labor in and find the deal to make it work. It is absolutely possible to not have your own money in if you have a proven record or can some other way prove that you can make your money partner an amount that is worth their risk. Just my 2c. Like they say.. it’s better to have small percentage of a deal than no deal at all
10 Reply
Jason S.
OP
Investor · Walnut Creek, CA · Member since 2018 · 43 posts · 27 votes
8y
@Henry LiChi - Exactly...thank you for the kind words. I will take you advise and attend as many meetups as possible. I am willing to do whatever it takes to succeed. If that means taking out the trash, sweeping the floors, getting the coffee, whatever I will do it! I want this to be my second job and to succeed to where I can pay off my debt but more importantly give back to my community. Thanks again!
2 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Originally posted by @Thomas S.:

"How does one get started without funds???"
You can not and should not be thinking about investing in real estate. With a income of 100K you should be back on your feet quickly, assuming you understand how to live a frugal lifestyle and be investing in less than 5 years.
Pay off all your debts, save money by living a super frugal lifestyle and rebuild your credit. Investing in your position is a laughable idea. As your banks have made very clear.
Getting a second job would be financially more productive and less work than wholesaling.
I would get a real estate license and work part time on weekends broker hate doing open houses sit at those you will pick up clients and investors that way.. get on a good team.. go to Anthonys RE school take you a few months and your in business.
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
6 Reply
Jason S.
OP
Investor · Walnut Creek, CA · Member since 2018 · 43 posts · 27 votes
8y
Hi @Jay Hinrichs I like that idea! I have actually thought about doing that...thanks!
0 Reply
Sam Shueh
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
8y
Suggest you take on another paid position to better situate your finances.

1 Reply
Mark Sewell
Investor · Houston, TX · Member since 2017 · 1k+ posts · 871 votes
8y
Avoid negativity, man. I know it's hard, especially right now.
Ditch FM radio, and/or sport radio, and start in hard on the podcasts. Start with BP but there are a few others out there you'll find and enjoy. Just start filling your head with positive thoughts, and pretty soon you'll get a vision.
BTW, if you find a good deal, there is really nothing stopping you from using HM loans. Nobody cares about DTI or any of that, just what the ARV is and how much you are lending. Hard to find really good deals, but people do it.
7 Reply
Calvin Lipscomb
Brooklyn, NY · Member since 2016 · 316 posts · 130 votes
8y
Originally posted by @Jason S.:
Hi Aaron,
1. Personal debt, CC, consolation loan, student loans.
2. No.
3. To get off-market deals.
4. Well, I keep hearing "if you find a good deal, the money will come"....like it falls from the sky or something...lol
#4 Is true. Do you have a good deal? When people analyze the deal you may find that it is an okay deal but not a good one. However, if it is truly a good deal there are plenty of investors who will work with you one way or another.
5 Reply
Jason S.
OP
Investor · Walnut Creek, CA · Member since 2018 · 43 posts · 27 votes
8y
starting new topic...good deal bad deal! watch for it. :)
2 Reply
Mark S.Pro Member
Rental Property Investor · KY · Member since 2013 · 1k+ posts · 538 votes
8y
Not sure if this has been mentioned as I skimmed the last half of the posts. You should read Set for Life by Scott Trench.
3 Reply
Brian Bradley
Attorney · Wilsonville, OR · Member since 2017 · 504 posts · 411 votes
8y
Take the time to invest in yourself first and fix ur financial situation. Keep your name active and keep analyzing and looking for deals. You find good deals and leverage your time, energy and hustle the money will show up to partner up with. But you need to put the fork into yourself first and foremost, and start rebuilding your financial strength. Good luck. Stay positive and focused.
2 Reply
Jason Hall
Houston, TX · Member since 2018 · 16 posts · 16 votes
8y
@Jason S. You're probably not gonna like this, and no one else has suggested it...but I would say move out of state for a while. Most of CA is a really tough RE market to break into. If your income is transferable, you could get back on your feet much more quickly by moving to cheaper, less competitive market out of state. Rent a nice place, have the kids visit during school breaks. Try it for six months to twelve months...see what happens. If it doesn't work...at least you know you tried.
2 Reply
Christopher Jackson
Real Estate Investor · Opa Locka, FL · Member since 2014 · 33 posts · 8 votes
8y
Start rebuilding your credit.. http://creditsecrets.refr.cc/cjackclose
1 Reply
Redgy Saint-Germain
Rental Property Investor · Boston, MA · Member since 2017 · 241 posts · 135 votes
8y
@Jason S.
I can give suggest a plan for the next year but it requires tremendous self-discipline. Since you're making close to 100k/year I would aim to save 10k (10%) or 833.33$/month NO MATTER HOW HARD THINGS GET or how are you want to spend that money DO NOT. While you're saving money make sure you keep your middle FICO score above 620. In the meantime watch the BP podcasts and use the BP calculator to start analyzing deals so you get comfortable with the numbers.
By this time next year I would say if you do this you'll have 10k in a bank account with an ok credit which should make you eligible for an FHA loan to buy (1-4 Units) with 3.5% down and get you started.
This plan will not make you rich in a year but I WILL HELP YOU GET STARTED.
Good luck
5 Reply
Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
8y
The point most are trying to make and the advice given is directed toward successful investing. The most important point to be take from this for new investors is that investing is not a path to getting out of debt. You must first get out of debt, pay off all bad debt, then begin to save for investing.
Investing to get out of debt is putting the cart before the horse. You need to be debt free with good credit to properly position yourself on a path to successful investing.
4 Reply
Account Closed
Rental Property Investor · Houston, TX · Member since 2018 · 106 posts · 56 votes
8y
@Jason S. I completely understand regarding no funds. What I did was trying to learn as much as I can regarding the market segment and be able to talk comfortably NOI and cap rates etc. I started marketing on multifamily trying to find potential good sellers. Once I get them in contract, then put together a presentation and start going to events to talk about the deal and ask other investors to invest in you.
5 Reply
Brandon Ingegneri
Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
8y
Step 1. Consolidate all of your debt if you can. One note, one balance, one solitary headache to worry about. Sometimes step 1 in real estate isn’t related to real estate at all. When you do that, you will have a platform to work off of.
1 Reply
Jason S.
OP
Investor · Walnut Creek, CA · Member since 2018 · 43 posts · 27 votes
8y
@Account Closed - Thanks! That's what I am doing...Sounds like I am on the right track!
0 Reply
Account Closed
Investor · Portland, OR · Member since 2017 · 182 posts · 115 votes
8y
@Jason S. Lord--- I pray one day I am in your shoes one day so I can come back from that S""" like the Gladiator! Partner up--- find guy or family trust with coin and credit with no expertise or time!
1 Reply
Derrick Gordon
Investor · Tri State Area · Member since 2018 · 107 posts · 24 votes
8y
Originally posted by @Jason S.:

@Dennis M. so what I keep hearing on here isn't true? That if you find a deal the money will come?
Its not FALSE ... but it won't be your deal. That is something you will have to Wholesale to someone with credit or Cash.
I'm in a Similar position, your timing is off. What you do is Take this time to rebuild credit and read and study. Study financing, Study Wholesaling (if that is something you desire to attack), listen to Podcast.
If your FICO is 640 ish, in 6 months you can be around 670-690 by aggressively paying down debt and getting a bit frugal for those months. You study your market and hunt for deals in this time, when your credit score jumps like 660 and you have some cash to play with, then Hard Money would be your best bet. That is currently my road map. Don't be in too much of a rush, people have been making money on Real Estate for Centuries, a few more months for you won't make or break you. Take your time to get right, but do NOT procrastinate! Be Patiently Aggressive!!!
2 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.