No Money To Fund My First Rental Property

Real Estate Consultant · MN · Member since 2019 · 42 posts · 14 votes

When starting a Real Estate investing business, the most common brick wall we run into is not having the funds to start.

This is one of the main reasons why we never start our Real Investing Estate Business in the first place. Here are a few tips in Raising enough Capital to start your own Real Estate Business.

1. 0% interest business credit: The banks loans out a line of credit to you for your business

2. Have investors tap into your own real estate and raise capital from the returns

3. HELOC: If you have equity in your home, use that for a rental property or Real Estate Properties

4. JV Capital: Wealthy friends, family, or Peers

5. Cash Savings: Leverage Cash savings to use towards any of these strategies

0 Reply

389 views

Most Popular Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

6mo

Quote from @Chris Seveney:

I believe zero-interest credit cards are an awful idea unless you absolutely know you have the money to pay it back. I see many people will do that, "figure it out later," thinking they can refinance or get the money elsewhere and then not be able to get it. All of a sudden, they are stuck with high-interest loans.

I think bottom line folks that want to jump into real estate have to come to the realization that this is a capital intensive business and one needs to save capital to realitically start in RE all this no money down no money out of pocket etc etc.. can work if your already in the industry like an Agent or lender or other RE professional surrounded by other RE professionals doing deals..

But to do this as a w 2 I have no real money or savings is simply not realistic 95% of the time one needs to be able to save after tax money to jump into RE..

Podcast Guest on Show #222

JLH Capital Partners51 Review

Website View Page

5 Reply

See this reply in the discussion

21 Replies

Jump to latestLatest

Sort by

Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
6mo
I believe zero-interest credit cards are an awful idea unless you absolutely know you have the money to pay it back. I see many people will do that, "figure it out later," thinking they can refinance or get the money elsewhere and then not be able to get it. All of a sudden, they are stuck with high-interest loans.
7e investments53 Reviews
Website View Page
3 Reply
- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  6mo
  Quote from @Chris Seveney:
  
  I believe zero-interest credit cards are an awful idea unless you absolutely know you have the money to pay it back. I see many people will do that, "figure it out later," thinking they can refinance or get the money elsewhere and then not be able to get it. All of a sudden, they are stuck with high-interest loans.
  
  I think bottom line folks that want to jump into real estate have to come to the realization that this is a capital intensive business and one needs to save capital to realitically start in RE all this no money down no money out of pocket etc etc.. can work if your already in the industry like an Agent or lender or other RE professional surrounded by other RE professionals doing deals..
  
  But to do this as a w 2 I have no real money or savings is simply not realistic 95% of the time one needs to be able to save after tax money to jump into RE..
  Podcast Guest on Show #222
  JLH Capital Partners51 Review
  Website View Page
  5 Reply
- Ann Crosby
  OP
  Real Estate Consultant · MN · Member since 2019 · 42 posts · 14 votes
  6mo
  @Jay Hinrichs Beautifully said capital is everything in this business. What a lot of experienced investors do is leverage what they already have rather than waiting to save from scratch. As long as the deal is backed by a real asset and has a clear structure, that’s what gives investors the confidence to deploy capital even if it’s not all their own.
  0 Reply
- Chris SeveneyBusiness Member
  Moderator
  Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
  6mo
  Quote from @Jay Hinrichs:
  
  Quote from @Chris Seveney:
  
  I believe zero-interest credit cards are an awful idea unless you absolutely know you have the money to pay it back. I see many people will do that, "figure it out later," thinking they can refinance or get the money elsewhere and then not be able to get it. All of a sudden, they are stuck with high-interest loans.
  
  I think bottom line folks that want to jump into real estate have to come to the realization that this is a capital intensive business and one needs to save capital to realitically start in RE all this no money down no money out of pocket etc etc.. can work if your already in the industry like an Agent or lender or other RE professional surrounded by other RE professionals doing deals..
  
  But to do this as a w 2 I have no real money or savings is simply not realistic 95% of the time one needs to be able to save after tax money to jump into RE..
  
  I agree. If you cannot budget with predictable income from a W2 job (you know when and how much you are getting paid), then real estate is not going to do you well since it is very unpredictable in regards to payments and expenses.
  7e investments53 Reviews
  Website View Page
  2 Reply
- Ann Crosby
  OP
  Real Estate Consultant · MN · Member since 2019 · 42 posts · 14 votes
  6mo
  @Chris Seveney absolutely agree that structure is everything. I’d also like to add that the unpredictability of real estate is exactly why so many people pursue it in the first place. Their W2 isn’t providing enough and they are looking for a way out. The goal isn’t to predict it’s to build systems that allow you to react when the market moves. That mindset shift is what separates the ones who make it from the ones who don’t.
  0 Reply
Joseph Neri
Investor · Houston, TX · Member since 2019 · 95 posts · 29 votes
6mo
Good list but I would add one more that most people never consider.
Building your own capital access system using a properly structured whole life insurance policy. It is not a quick fix -- it takes time to build cash value. But once it is there, you have a pool of capital you can borrow against with no credit check, no bank approval, and no one telling you no.
The part that makes it work for real estate is your cash value keeps growing even while you have a loan out. So you borrow against it for a down payment or a flip, do the deal, pay yourself back, and repeat. Each cycle the cash value is bigger and the system gets stronger.
The biggest mistake beginners make is chasing the first deal without building a foundation. If you start a policy now, in 3-5 years you have a capital source that works on your terms for the rest of your career. It is not sexy and it is not fast. But the investors I know who are still in the game after 10 plus years all have some version of this.
And at the end of the day it is a life insurance product. You are protecting your family first. The capital access is just how they let you use it while you are alive.
3 Reply
- Brandon Beaudoin
  Rental Property Investor · Henderson, NV · Member since 2019 · 105 posts · 60 votes
  6mo
  Quote from @Joseph Neri:
  
  Good list but I would add one more that most people never consider.
  Building your own capital access system using a properly structured whole life insurance policy. It is not a quick fix -- it takes time to build cash value. But once it is there, you have a pool of capital you can borrow against with no credit check, no bank approval, and no one telling you no.
  The part that makes it work for real estate is your cash value keeps growing even while you have a loan out. So you borrow against it for a down payment or a flip, do the deal, pay yourself back, and repeat. Each cycle the cash value is bigger and the system gets stronger.
  The biggest mistake beginners make is chasing the first deal without building a foundation. If you start a policy now, in 3-5 years you have a capital source that works on your terms for the rest of your career. It is not sexy and it is not fast. But the investors I know who are still in the game after 10 plus years all have some version of this.
  And at the end of the day it is a life insurance product. You are protecting your family first. The capital access is just how they let you use it while you are alive.
  
  If a policy is designed right and designed with the intention of higher, earlier cash value you can have PLENTY of liquidity as soon as you fund a policy with a healthy "dump in" (Single Premium Paid Up Addition or SPUA for short). It comes with tradeoffs of course but the reality is that you can be highly liquid year one with the right design and right carriers.
  It's a fantastic strategy.
  3 Reply
Tienna Matthews
Financial Advisor · Tallahassee, Americas · Member since 2025 · 25 posts · 10 votes
6mo
Good list but I'd add one more that most people overlook because they don't know it exists.

Private and hard money lending with 100% financing structures.

I'm a former underwriter on the hard money side and one thing I learned sitting on the lending desk is that most borrowers never even ask about full leverage options. They assume every private lender requires 10 to 20 percent down and walk away from deals they could have funded.

The reality is there are capital partners out there who will fund 100% of the deal, purchase and rehab, if the asset and the borrower profile make sense. The underwriting is different from conventional. They're looking at the deal itself, ARV, margin, exit strategy, and the borrower's track record more than their bank account balance.

The reason most investors hit that "not enough capital" wall is because they're only looking at the options you listed, which are all great, but they all require you to already have something. Savings, equity, wealthy friends, or strong enough credit for a business line. That leaves out a lot of people who have the hustle and the deal flow but not the balance sheet yet.

What I've seen work best for newer investors is starting with a strong deal first, not capital first. If the deal underwrites well, the capital finds you. Private lenders and hard money shops are actively looking for deal flow. Most people have it backwards thinking they need money before they find the deal.

Not knocking any of the strategies you listed because they all work. Just saying there's a whole lending ecosystem that most people never tap into because they don't know how that side of the desk thinks.

Tienna Matthews
2 Reply
- Ann Crosby
  OP
  Real Estate Consultant · MN · Member since 2019 · 42 posts · 14 votes
  6mo
  @Tienna Matthews nice! That works too!
  0 Reply
Richard Billingsley
Investor · Member since 2023 · 73 posts · 32 votes
6mo
I would look into the infinite banking concept (IBC). You ultimately leverage your life insurance policy and use the cash value to purchase assets. Once you understand it, it's really not a bad idea.
3 Reply
- Brandon Beaudoin
  Rental Property Investor · Henderson, NV · Member since 2019 · 105 posts · 60 votes
  6mo
  Quote from @Richard Billingsley:
  
  I would look into the infinite banking concept (IBC). You ultimately leverage your life insurance policy and use the cash value to purchase assets. Once you understand it, it's really not a bad idea.
  
  I sell life insurance so I'll get that out of the way from the whole life/permanent life haters.
  And sell it because I "caught" the IBC and want to help share it's incredible benefits with others.
  Once one understands it and how throughout life we finance everything we buy - we either pay interest to others or give up interest we could've earned elsewhere - it becomes incredibly clear how specially designed, dividend paying whole life insurance is a fantastic place to store capital.
  My only regret from all my real estate investments (STR, LTR, MF, Mineral Rights) is that I didn't know the strategy sooner and flow my capital through my policies first.
  I can't imagine how much growth in cash value (and therefore DB) from contractually guaranteed growth and dividends I'd have each year. Probably well over $20 or 30k+ in dividends* alone each year.
  We live and learn....
  * dividends are not guaranteed but with the right carriers have paid out well over 100+ consecutive years in every economic environment
  3 Reply
- Richard Billingsley
  Investor · Member since 2023 · 73 posts · 32 votes
  6mo
  Quote from @Brandon Beaudoin:
  
  Quote from @Richard Billingsley:
  
  I would look into the infinite banking concept (IBC). You ultimately leverage your life insurance policy and use the cash value to purchase assets. Once you understand it, it's really not a bad idea.
  
  I sell life insurance so I'll get that out of the way from the whole life/permanent life haters.
  And sell it because I "caught" the IBC and want to help share it's incredible benefits with others.
  Once one understands it and how throughout life we finance everything we buy - we either pay interest to others or give up interest we could've earned elsewhere - it becomes incredibly clear how specially designed, dividend paying whole life insurance is a fantastic place to store capital.
  My only regret from all my real estate investments (STR, LTR, MF, Mineral Rights) is that I didn't know the strategy sooner and flow my capital through my policies first.
  I can't imagine how much growth in cash value (and therefore DB) from contractually guaranteed growth and dividends I'd have each year. Probably well over $20 or 30k+ in dividends* alone each year.
  We live and learn....
  * dividends are not guaranteed but with the right carriers have paid out well over 100+ consecutive years in every economic environment
  You wouldn't happen to know a provider that would let me sign a policy while overseas, would you?
  1 Reply
- Brandon Beaudoin
  Rental Property Investor · Henderson, NV · Member since 2019 · 105 posts · 60 votes
  6mo
  Quote from @Richard Billingsley:
  
  Quote from @Brandon Beaudoin:
  
  Quote from @Richard Billingsley:
  
  I would look into the infinite banking concept (IBC). You ultimately leverage your life insurance policy and use the cash value to purchase assets. Once you understand it, it's really not a bad idea.
  
  I sell life insurance so I'll get that out of the way from the whole life/permanent life haters.
  And sell it because I "caught" the IBC and want to help share it's incredible benefits with others.
  Once one understands it and how throughout life we finance everything we buy - we either pay interest to others or give up interest we could've earned elsewhere - it becomes incredibly clear how specially designed, dividend paying whole life insurance is a fantastic place to store capital.
  My only regret from all my real estate investments (STR, LTR, MF, Mineral Rights) is that I didn't know the strategy sooner and flow my capital through my policies first.
  I can't imagine how much growth in cash value (and therefore DB) from contractually guaranteed growth and dividends I'd have each year. Probably well over $20 or 30k+ in dividends* alone each year.
  We live and learn....
  * dividends are not guaranteed but with the right carriers have paid out well over 100+ consecutive years in every economic environment
  You wouldn't happen to know a provider that would let me sign a policy while overseas, would you?
  
  I write for a couple carriers and much like anything else in life insurance I think the answer is "it depends". I haven't written policies on anyone living overseas but am happy to ask the question and find out. Be an opportunity for me to learn because I also currently live overseas (Okinawa and work on Kadena AB).
  If you want to provide more details here or in a message feel free to do so.
  1 Reply
- Ann Crosby
  OP
  Real Estate Consultant · MN · Member since 2019 · 42 posts · 14 votes
  6mo
  @Richard Billingsley So many ways of pulling capital! Nice Richard :)
  0 Reply
Jules Aton
MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
6mo
While I get the appeal of the speed to scale with leverage early on I also think there is value in saving and starting with what we can afford. Having to swing a hammer and count every dollar was a protective factor for me.
1 Reply
- Ann Crosby
  OP
  Real Estate Consultant · MN · Member since 2019 · 42 posts · 14 votes
  6mo
  @Jules Aton Nice! That's another good way! As long as you have a plan in place :)
  0 Reply
John MorganPro Member
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
6mo
I only had 25k in savings when I started investing in real estate 11 years ago. I had to be creative since I was only making 40k/year with two kids. I tapped into our Roth IRAs to pull out money tax free (the basis only). I took out a HELOC for 38k. I used at least six 0% interest for a year credit card loans for 20k each time. I did five 401k loans for up to 50k to buy five houses. I took out a line of credit from my bank for 25k when I needed cash quickly. I took out a line of credit for up to 50k at another random bank for another deal where I needed cash right away. And I've bought 14 houses with 5 cash out refis when my equity built up. It felt like I was buying houses for free since they didn't cost me a penny out of pocket to get them. My wife wouldn't let me buy rental houses with our savings so I had to get creative. lol. I did pay myself back from the money I initially borrowed from savings and our Roth IRAs with the rental income. So I'm now basically all in with infinite cash flow from here on out. When they say use other people's money, I did that and have no regrets. And when my cash stacks up in my savings account from the mailbox money, I make insulting low ball offers on properties occasionally for fun. I've got 37 SFR now, so I definitely don't need anymore. But if I can get a property for a great deal, I'll grab it.
1 Reply
- Ann Crosby
  OP
  Real Estate Consultant · MN · Member since 2019 · 42 posts · 14 votes
  6mo
  @John Morgan Real Go getter! Nice Mr.John :) it all works out for the best if we have something to back this up.
  0 Reply
Janice Carter
Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 607 votes
6mo
@Ann Crosby Solid list and those are all viable paths to get started. That said, having some skin in the game should be expected of any serious investor. It not only builds credibility with partners and lenders but also forces better decision-making on deals.
1 Reply
Ann Crosby
OP
Real Estate Consultant · MN · Member since 2019 · 42 posts · 14 votes
6mo
Of course @Janice Carter! working with pre vetted flippers who already have a track record of profitable deals and have strong relationships is number one before pulling any capital out :)
0 Reply
Ethan HaiglerBusiness Member
Real Estate Agent · Charlotte, NC · Member since 2019 · 111 posts · 58 votes
6mo
@Ann Crosby
I’ll add a few:
Seller finance opportunities
Private lenders that will fund up to 100% of deal
[email protected]704-607-2078
3 Little Pigs Rental Management
Website View Page
1 Reply

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