Different ways to get deals funded

7 Replies

I’m a newbie looking to buy first deal. Only thing stopping me is capital. I’d like to syndicate soon. I also would like to learn different ways to creatively finances my deals. Any suggestions?

Live in flip/house hacking with primary residence or a multi (I would prefer a multi), Seller/Owner financing, borrow down payment from friends and family, network with other investors in your area and try to sell yourself as bringing some “sweat equity” to the table.  

Are you wanting to do a syndication as your first deal? 

Originally posted by @Darrius Leach :
I’m a newbie looking to buy first deal. Only thing stopping me is capital. I’d like to syndicate soon. I also would like to learn different ways to creatively finances my deals. Any suggestions?

If you qualify for an FHA loan, house hack a multi unit property (2-4). The amount of capital required is minimal and having someone else pay the mortgage will help you save money toward the next property.

If you can't come up with the down payment and the closing costs, you should probably save a little money first and then buy.

Stephanie 

I would like to syndicate as my first deal. I know it would be a lot of work, but it’s worth it. My first deal would be to house back, but after I’d like to put together a syndication.

Originally posted by @Darrius Leach :

I would like to syndicate as my first deal. I know it would be a lot of work, but it’s worth it. My first deal would be to house back, but after I’d like to put together a syndication.

 When you say syndication, what do you mean?

Originally posted by @Stephanie P. :
Originally posted by @Darrius Leach:

I would like to syndicate as my first deal. I know it would be a lot of work, but it’s worth it. My first deal would be to house back, but after I’d like to put together a syndication.

 When you say syndication, what do you mean?

 seems like folks are now thinking the way to break into real estate ( which used to be wholesaling ) now its I want to be a syndicator.

DArrius  Syndication is a very advanced strategy that is rarely pulled off by anyone who does not have serious experience in real estate either working for a syndicator or real commercial brokerage or working for a hedge fund.   Its kind of like learning to fly on the SR 71  not even a 747  and doing mach 2.5 on your first deal  :)  you may want to get some experience in your bucket before launching into this. 

for many reasons..

Originally posted by @Darrius Leach :

You other people money to fund my deals.

 I think your terminology is tripping  you up.

If you find a property that you think is below market, put a contract on it with a minimal EMD. Then go sell the contract. That's wholesaling. When someone else buys your contract and the purchase is consummated, you get paid. That's using someone else's money to fund your deals.

If you find a run down house and get a hard money lender to give you 80% of the purchase price and 100% of the rehab (of course on a draw schedule once the rehab is done) and you only have to come up with 20% of the beat up house's purchase price plus operating and rehab expenses; that's using a lot of someone else's money and some of yours or maybe a partner's to fund your deals.

If you get seller financing on a 5+ unit apartment building and you get it below market (maybe the owner's wife just died and he just wants to move to Florida) and then we come in and let your refinance it for 70% loan to value with no seasoning, that's using someone else's money to fund your deals.

Are you trying to get a bunch of guys together to throw money into a pot so you can find deals for them and make them all 10% or so on their money (and of course you're not going to put any into the pot because you'll be busy finding the deals)?  On a large scale, that's what I call syndication.  Investopedia describes a syndicate "as a temporary alliance of financial services entities formed to handle a large transaction that would be difficult to handle individually."  Sort of what I said only more refined.

So what kind of deals do you have that someone else is going to fund for you?   

Stephanie