Buying my first rental, with little money down....

Creative Real Estate Financing
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Buying my first rental, with little money down....

Michael Coiffman
Tampa, FL · Member since 2017 · 4 posts · 2 votes

Hello Bigger Pockets family,

Here is my current situation, my current credit is in the mid's 500's , I have income close to the $90's / year, but no money down.

I will have access to maybe $7k by next year. My desire is to start buy and hold investment asap. I know the house hacking concept but 

we rent in a really nice neighborhood and we have no plans for buying primary residence, I was want to start rentals buy and hold for 

passive income later refi and get the next one ans so on.... I can get my credit to mid 600's in the next 6 months since I have been paying 

debt and dealing with creditors. I have this big dilemma.... I see myself taking a while for getting 20 to 25% down and house hacking it is 

not in the picture. Can you guys give me guidance so I can get started in my current situation ? Thanks :)

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Tom S.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
8y

@Michael Coiffman  Personally if you think your credit will be in the mid 600's in only 6 months I would wait on buying and see if you have more financing options.

If you're looking to buy right now then an owner finance deal would probably be your best bet.  You'll probably have to put down something though.

My first owner finance deal was $80k, and 10% down, so $8k.  I had about $2k in closing costs total, and as a rental , side aside a reserve of $5k.  So about $15k out of pocket.   

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  • Tom S.
    Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
    8y

    @Michael Coiffman  Personally if you think your credit will be in the mid 600's in only 6 months I would wait on buying and see if you have more financing options.

    If you're looking to buy right now then an owner finance deal would probably be your best bet.  You'll probably have to put down something though.

    My first owner finance deal was $80k, and 10% down, so $8k.  I had about $2k in closing costs total, and as a rental , side aside a reserve of $5k.  So about $15k out of pocket.   

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  • Alpesh Parmar
    Investor · Dublin, CA · Member since 2016 · 344 posts · 228 votes
    8y

    @Michael Coiffman Agree with @Tom S. It's better to wait to improve your credit. It would be hard to get no money down deal with that credit and no RE investment experience. I am not saying it's impossible but would be hard.

    Another way would be find private money from friends and family for down payment.

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  • Linda S.
    Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
    8y

    @Michael Coiffman,

    You make almost $90K, no savings, low credit and want to get into real estate?    I always say you either need cash, or access to cash! 

    Personally, I'd recommend paying off debt and getting your score up!   Do Uber, or something, save like crazy and get  your score up!  I don't know anyone who would willingly lend to someone in the 500's, so connections will be your best bet.    Read books to help educate yourself and change your mentality on money!    After you save up,  find a mentor and volunteer to help and learn the business, whichever path you are going.

    Also, not sure how handy you are, but learning basic electrical/plumbing/drywall/etc will pay for itself tenfold if you are going to be doing any renovations!   The more you can do, the more you can keep!

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