Creative Real Estate Financing

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Creative Financing for Turn Key Investment vs VA loan duplex

Posted Jun 27 2019, 13:11

I am incredibly new to investing and still in the research phase. 

Scenario 1: Out of state turn key for 100k, after rehab should be about 150k, rent about 1300. Bank will want 25% + closing costs + reserves. How do I get the 25% (please don't say friends and family)

Scenario 2: 300K-360K duplex (hardly any quadplexes in my area of California) funded by VA loan. No money down but 3x the loan amount.

Any tips or suggestions would be greatly appreciated. Like I said I am very new to this and am researching a lot of the QnA's from the forums here and other podcasts. 

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Replied Jun 30 2019, 12:12

Thanks for your post Jessica. I am in exactly the same position - totally new to RE investing, and still in the learning/soaking up knowledge stage. Just upgraded to BP Pro to get the maximum perks out of this awesome service (thanks BP!) 

My local market is fairly high priced too, and I’ve got limited starting capital. So I’m leaning towards starting out with out-of-state turnkey investment rental properties with good cash on cash return (12% or higher) and good positive cashflow as buy and hold investments. 

From my research I understand that your COCROI actually improves if you use financing. (Can some of you more experienced BP investors please confirm this and explain why this is the case?). 

Back to Jessica’s question - What are some of the best creative ways for us newbies to get the required initial funding in place for the typical 20%-25% down payment on a traditional loan? Also, what should we expect to pay private money lenders in interest and what are the typical terms? As I’m sure Jessica will agree, we’d like to use creative funding of other people’s money to get started, but without sacrificing too much of our investment property’s monthly cashflow by simply paying it all back in interest to our lender. 

Thoughts and/or suggestions? 

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Account Closed
  • Rental Property Investor
  • Tampa FL 33610
59
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254
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Account Closed
  • Rental Property Investor
  • Tampa FL 33610
Replied Jun 30 2019, 15:45

@Jessica Mills @Leon Rossouw  There are many threads here "how to get started". Training on BP as well. Be specific what you want to do with what you have in your hand. If you do not have 20-25% - what can you do to obtain? Once you have the DP, then how will you get the funding? How is your credit? Your income? Ability to pay? 

haha ok I won't say friends and family in Cali. Leon, don't see where you are located. 

Yes rehab is great return but it takes time and more risk than wholesaling. 

What about birddog and wholesaling for now? Earn and learn. Learn and earn.