What Avenues are You Utilizing to Get Your Deals Funded?

Specialist · Atlanta, GA · Member since 2019 · 31 posts · 9 votes

Whether you're a fix and flipper or landlord investor another type of real estate investor, what are the current resources you are utilizing to get your deals funded?

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Angelica M Garzon

Rental Property Investor · Miami, FL · Member since 2018 · 110 posts · 113 votes

Hey Chadd,

For my buy and hold properties I like to use local credit unions or portfolio lenders. I practice long distance investing and have learned that the easiest way to open a credit union account in a state that you do not reside in is by opening an LLC or Corp in that state and then opening the account under that company. This allows you to qualify to the great products small credit unions have to offer.

For my Fix-n-Flips I usually do private money (hard money) or conventional rehab loans (the application and approval process is tedious but they have better interest rates and fees).

When I first started and had "no money or credit" family and friends were my lenders. I approached them with specific terms that would benefit them and secure their investment on me (interest, payment due dates etc..).

Best of luck!

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Tom S.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
7y
@Chadd Brandon For buy and holds, small local banks (portfolio lenders) that can provide both purchase + rehab financing. Typically 0 points, 6% interest, 20 year term (commercial loan, adjusting after 5 years). Far cheaper than HML.
- Tom
2 Reply
Angelica M Garzon
Rental Property Investor · Miami, FL · Member since 2018 · 110 posts · 113 votes
7y
Hey Chadd,
For my buy and hold properties I like to use local credit unions or portfolio lenders. I practice long distance investing and have learned that the easiest way to open a credit union account in a state that you do not reside in is by opening an LLC or Corp in that state and then opening the account under that company. This allows you to qualify to the great products small credit unions have to offer.
For my Fix-n-Flips I usually do private money (hard money) or conventional rehab loans (the application and approval process is tedious but they have better interest rates and fees).
When I first started and had "no money or credit" family and friends were my lenders. I approached them with specific terms that would benefit them and secure their investment on me (interest, payment due dates etc..).
Best of luck!
8 Reply
Chadd Brandon
OP
Specialist · Atlanta, GA · Member since 2019 · 31 posts · 9 votes
7y
@Tom S. that's pretty good. by the way, I visited Burlington, VT for 2 weeks last spring and absolutely LOVED IT! I stayed at the Hilton Garden Inn right there in the heart of all the action and down by the lake, did the syrup tour @ Bragg Farm Sugarhouse and even had a pretty big bird decide to take off as I was passing it and fly across my windshield and hit it with the sound of a big "THUNK" while driving to the Bragg Farm. I had a lot of good times there...thinking about buying a summer home there. I absolutely love Burlington (in the warmer months, of course).
1 Reply
Chadd Brandon
OP
Specialist · Atlanta, GA · Member since 2019 · 31 posts · 9 votes
7y
@Angelica M Garzon thanks for sharing! Sounds like you have a good handle on things. I definitely know what you're speaking of regarding the conventional way tedious paperwork. If you ever need another resource, let me know.
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Matt P.
Investor · Columbus, OH · Member since 2015 · 625 posts · 601 votes
7y
@Chadd Brandon For the most part I use my cash and credit to purchase, rehab and carry it for 6 months before I finance to long term debt and get all of my money back. I have started working with a couple private lenders lately but it has taken me several successful projects and a few years to get there.
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Salvatore Lentini
Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
7y
I use non-traditional national lenders (private equity, Wall St money, insurance companies etc) that I've developed relationships with. They have simple underwriting (no tax returns or W2s required). Loans are based almost entirely on the financials of the property not the individual. For the properties I purchase myself, those are the lenders I use. Easy and rates are only about a point or two higher than traditional. When I partner with wealthy individuals I get bank financing. Even though it's difficult and tedious, they do have the best rates and terms.
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Chadd Brandon
OP
Specialist · Atlanta, GA · Member since 2019 · 31 posts · 9 votes
7y
@Salvatore Lentini good stuff! That's awesome! Best wishes for your continued success in all your real estate endeavors.
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Chadd Brandon
OP
Specialist · Atlanta, GA · Member since 2019 · 31 posts · 9 votes
7y
@Matt P. Thanks for sharing. Let's connect.
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Daniel D.
New York, NY · Member since 2015 · 20 posts · 4 votes
7y
@Angelica M Garzon
Hey Angelica my plan is to start investing out of state but I'm stuck because of the lack of funds. Do you think opening up an LLC is my best bet for obtaining a business line of credit?
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Brandon SturgillBusiness Member
Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
7y
@Chadd Brandon We structure purchase money mortgages on everything we acquire...stopped using banks years ago...kind of a silly concept to use bank money once you figure out how to structure a deal.
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Tom S.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
7y
@Daniel D. I went down the path of opening an LLC for business line of credit. In the beginning, since the LLC has no credit history, they look to your personal credit. So anything you can obtain business wise, you can just apply personally.
As Angelica mentioned, going to local banks and credit unions is a great way to go, and that's what I do. but any LLC still requires a personal guarantee, which means a review of your personal financials.
Hope that helps,
- Tom
3 Reply
Chadd Brandon
OP
Specialist · Atlanta, GA · Member since 2019 · 31 posts · 9 votes
7y
@Brandon Sturgill That's flavor right there! I like that. I definitely love how creative you can get with funding real estate deals which then crosses over to other financial aspects of life. Thanks for the share!
1 Reply
Zach Quick
Investor · Bentonville, AR · Member since 2014 · 759 posts · 379 votes
7y
@Salvatore Lentini What kind of properties/projects for the first example?
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Zach Quick
Investor · Bentonville, AR · Member since 2014 · 759 posts · 379 votes
7y
@Brandon Sturgill primarily SFR's? Primarily target heavy equity homes?
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Andrew Cornstubble
Rental Property Investor · Sedan, KS · Member since 2016 · 125 posts · 92 votes
7y
@Chadd Brandon owner financing a mortgage, and private money soon. I'm fortunate enough to know a few wealthy investors that came from nothing and once i can prove competence to myself and the bank stops forking over money I'm going to see if they are interested.
My wife and I work full time and I just did something I swore I'd never do and got another dump truck. And rental income i guess but for now it's all going into rehab.
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Chadd Brandon
OP
Specialist · Atlanta, GA · Member since 2019 · 31 posts · 9 votes
7y
@Andrew Cornstubble You're competent, buddy. Keep the faith. Just always remember to think "outside the box" when it comes to getting a deal structured and funded. Don't just rely on one exit strategy. Have multiple exits in mind starting with your first preferred method followed sequentially by the other exits prioritized if your first exit strategy isn't going to bare any fruit. Let's connect. Thanks for the share!
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Nat Rojas
Rental Property Investor · Elkridge, MD · Member since 2018 · 115 posts · 40 votes
7y
Originally posted by @Brandon Sturgill:

@Chadd Brandon We structure purchase money mortgages on everything we acquire...stopped using banks years ago...kind of a silly concept to use bank money once you figure out how to structure a deal.
Brandon - could you please elaborate and provide a few examples on how you structure a deal?
I'm primarily interested in buy and holds and how to structure deals with lenders
Thanks in advance!
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Account Closed
Las Vegas, NV · Member since 2018 · 100 posts · 140 votes
7y
@Daniel D.
It's pretty much the only way of getting business credit , you won't get it without a LLC & EIN.
Its based on personal credit but is a second line of credit, hidden from your FICO , it’s fairly straightforward and can find you $50 to $100k useable funds within a couple of years
If you plan to be in real estate for ever, then it’s a no brainer to start building business credit
3 Reply
James Murphey
Waipahu, HI · Member since 2018 · 121 posts · 81 votes
7y
I plan on using my 457b money when I start investing. It is similar to 401k, but you do not have wait until you are 59 to pull the money. You can pull as soon as you separate from your employer who the 457b is held under. I know some people take loans out on 401k's I think in general this is a bad idea, because you are paying for pretaxed dollars with after taxed dollars, but I think there is some way when investing in real estate this can make sense. If anyone can explain how to make this work let me know. I might look into this option too.
1 Reply
Daniel D.
New York, NY · Member since 2015 · 20 posts · 4 votes
7y
@Stuart Smith Thank you for guiding me towards the right direction. Would it be smarter to form an LLC with an attorney? What other route would you suggest for a brand new investor with no capital? I have money saved up with excellent credit but I would rather weigh out my options.
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Account Closed
Las Vegas, NV · Member since 2018 · 100 posts · 140 votes
7y
Forming a LLC is simple, plenty of online companies geared up for just that, and getting the EIN for you
It’s what state do you register in that’s down to your personal situation, and where you intend to buy
Credit wise, your business starts on the date your EIN is issued, and the journey begins.....
1 Reply
Angelica M Garzon
Rental Property Investor · Miami, FL · Member since 2018 · 110 posts · 113 votes
7y
Originally posted by @Daniel D.:

@Angelica M Garzon
Hey Angelica my plan is to start investing out of state but I'm stuck because of the lack of funds. Do you think opening up an LLC is my best bet for obtaining a business line of credit?
Hey Daniel,
Before you spend money opening an LLC I suggest you go to your local credit union, bank and portfolio lender and find out what they're looking for exactly to qualify you for a business line of credit of x amount.
They must have specific qualifying factors and it might be easier to get a line of credit under your name and credit history. If you own any properties (including you primary) and have at least 30% equity you might be able to take out a HELOC (home equity line of credit) by using your property as collateral.
Good Luck!
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Account Closed
Las Vegas, NV · Member since 2018 · 100 posts · 140 votes
7y
The specific qualifying factors for business credit are, for starters....
Having a LLC
Having a EIN
0 Reply
Andrew Cornstubble
Rental Property Investor · Sedan, KS · Member since 2016 · 125 posts · 92 votes
7y
@Chadd Brandon I appreciate the words of encouragement! Fortunately my area is affordable enough I can afford to eat a bad deal or two, but I do try and figure out at least 3 seperate exits before I even think about putting in an offer.
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Salvatore Lentini
Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
7y
Hi @Zach Quick - I've used these types of lenders on everything from single family, small multi family, larger multifamily, office, industrial and retail. I never would've been able to build a portfolio like I have with traditional lenders. Well, maybe but it would've taken me several lifetimes!
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