Good morning from a newbie. I’ll jump right into it. I live 25 minutes from an area with an extremely hot rental market combined with a housing shortage. Example, I am closing on a 1300 SQ ft single fam home (3/2/1). I posted it for lease and in 48 hours had over 200 inquiries. I have a signed lease from someone with solid references and credit who paid the deposit, 1st months rent, and a pet deposit up front without stepping a foot in the house. I have the opportunity to obtain more properties like this however I have now extinguished my available cash for the normal 20% down required. I have a list of people with, literally, cash in hand ready to rent and several homes I could purchase but I simply don’t have the down payments to go after them. I now have 3 of these properties which net an average $500 per month each after the mortgage payment. I’m seeking tips on getting into these with minor little money down. I could obtain a commitment to rent which would clearly show the rent would more than pay for the mortgage. We do not have a “friends and family” fund to tap in to either and unfortunately all the properties I know of are listed by agents keeping me away from the owner. I’m looking for creativity..... Suggestions?
@John Rush - Early in my REI start I came across a listed property that had been sitting for awhile. I made contact with the listing agent (first by email, then in person). And started a conversation about letting me lease-option this property from the seller while also paying the Realtor's full commission. I explained how I'd rehab the seller's property out of my pocket to be rental ready and get it rented out, so the seller had nothing to lose, since I'd be improving his property, which he'd still own. I'd just have an option against the property preventing him from selling to anyone else during the option period of 2 years. This deal did not take place, but had it worked out, I would have been in for very little out of pocket, as I was going to use a zero-interest credit card to fund the rehab. I would have just needed to pay the Realtor's 2.4% commission and a $1,000 option fee.
But even thought it did not work out in that case, that same Realtor brought me a deal shortly thereafter, so it was still a worth-while effort. And a short time later I got 3 lease-option deals done with $100, $1000 and $3000 out of pocket - respectively. So I suggest talking to each Realtor with a listed property you are interested in to see if there is any motivation to do something creative.