Creative financing, no money down??

[Brady D'Hont]

After getting under contract with a property using only my personal savings for the DP., i still have this momentum and energy to acquire more properties (but with lack of capital). Understanding how to get creative with financing is where im having trouble. Does anybody have recommendations on books, podcasts, people to get in contact with for guidance on how to raise capital for add value properties? 

[Nicholas L.]

@Brady D'Hont

i wouldn't recommend "raising capital" at this point in your investment career.  the best way to raise capital for real estate... is income from your W2.

but, if you're motivated, go find a seller willing to do seller finance.  it might take you months.  it took me 3 years to find my first SF deal.  now have bought 2 so far and working on a few more.

is that work you're willing to put in?

[Eliott Elias]

If you are in a position where you are finding good deals, but with no capital, you have now become a wholesaler.
What you need to do is raise capital. Find private investors who believe in you to fund your deals.

[Scott Trench]

I agree with the other posters here. If you want to "sling deals" get licensed and become an agent, or consider getting into wholesaling. But, beware, wholesaling is not for the faint of heart, can be extremely difficult, and I personally believe that a solid W2 career is way, way higher probability for most than getting into wholesaling. 

I bet there are less than 1,000 wholesalers in this country who will earn six figures more than 1 year in a row.

[Russell Brazil]

1) Save

2) Make more more money to save more

3) Look at properties that arnt selling to possibly seller finance

4) Borrow more funds

5) Improve the properties you have then pull equity out of them via heloc or cash out. 

[Christian Ehlers]

I'd agree here that seller financing can be a great option to get additional properties with low down payments. Getting 0% down is incredibly more rare than youtube & instagram will make it seem though. However if you have a good enough deal you can raise private money for the down payment and pay simple interest or bring them in as a partner on the deal if they provide the $$ you need to get the deal done. 

I beleive partnerships are best for short term projects (flips for example) and raising money is better for long term buy and hold (you still hold all the decision making power). 

Hope this helps!

[Tom S.]

@Brady D'Hont Similar to what others mentioned above, for me the BRRRR method is a good one. Using round numbers, starting off with a $25k DP for a $100k property and saving up for that is the hard part. Then BRRRR, and ideally pull out $25k after fees for your next DP, also leaving equity in the property and have it be cash flowing. Then repeat that process a few times. Having a good W2 job is certainly helpful for getting the best loan terms.

I also did a number of seller financed deals that I purchased.  With the two strategies combined, it's been very successful.

Hope that helps and good luck!

[Brady D'Hont]

Thanks the feedback Tom! Are you investing in your local market or out of state? When finding your BRRR deals do you have contractors in place beforehand or is getting a deal in place your first move then contractors? 

Quote from @Tom S.:

@Brady D'Hont Similar to what others mentioned above, for me the BRRRR method is a good one. Using round numbers, starting off with a $25k DP for a $100k property and saving up for that is the hard part. Then BRRRR, and ideally pull out $25k after fees for your next DP, also leaving equity in the property and have it be cash flowing. Then repeat that process a few times. Having a good W2 job is certainly helpful for getting the best loan terms.

I also did a number of seller financed deals that I purchased.  With the two strategies combined, it's been very successful.

Hope that helps and good luck!

[Tom S.]

@Brady D'Hont  Brady - on your questions to me, I invest local (VT) and have contractors mostly in place, depending on the exact location.  Once you start to do a few rehabs, you can walk the place and at least get a rough estimate in your head.  Then I would make the offer and use the inspection period to get the contractors in and get better numbers.  

I also use local banks that can provide purchase + rehab financing all in one loan. The bank will do an appraisal based off the ARV, so that way the numbers are already known up front and generally, minimal surprises.

As mentioned in my original post, the goal is to create equity,  and get your DP back out through a refi (and still leave equity in the property) and still have a cash flowing rental property.  Then take that DP and repeat!

[Tim Bratz]

If you're going to get the "itch" to buy more property, you're going to run out of your own money eventually. Save up all you want to buy another property, but eventually you'll have to be able to raise some private money. That said, creative financing is a great tool in the tool belt right now, but that doesn't take away the need to raise private cash.