Beginners with No Money - How to Finance $5,000,000 in deals

[Austin Hughes]

I hope this info will impact at least one investor seeking direction on where to go for funding deals.

I've taken the next step in my business along the progression of the "Financial Path for Funding" as I like to call it. Looking back on where I started, I thought it might be valuable to provide a roadmap for newer people so that you can see each step and where it fits in to the bigger picture in terms of finding money for deals.       This is how I started with nothing (no credit, money, track record, or job) and did deals to get to the point where I have a portfolio at $5MM in value (which is a lot in a very inexpensive market).

I will say: This was MY path, and you don't have to do it like me. But I hope you get inspiration and clarity on YOUR path.      

1. Wholesale 
   1. Build Cash/Experience. Cheap to pay earnest $.
2. Wholetail
   1. Build Cash/Experience. Cheap to pay earnest $.
3. Flip Mobile Homes for Cash
   1. Spend $5,000/deal
4. Private Lenders on Flips
   1. Track Record starting to build up. Get Private lenders to believe in me. 
5. Partnerships on Small Rentals
   1. Use partner's credit and $ and I do boots on ground work.
6. Private Lenders on Small Rentals
   1. Started taking down my own rentals. I had to have a cushion for maintenance and vacancy built up.
7. Hard Money Lenders on Flips
   1. With track record, more sophisticated lenders would take a chance on me.
8. Refinance at Bank
   1. EUREKA! This was the big breakthrough.   Finally built up enough credit and most importantly CREDIBILITY. Hard money lenders said great things about me and that got me in the door at banks.
9. Bank Loans for Rentals
   1. Access to bank financing opened up the floodgates & bought 50 units in 1 year.
10. Small Unsecured Line of Credit at Bank
    1. Do deals faster. More competitive. They trust me to make good decisions.
11. Portfolio Long Term Cash Out Refinance
    1. This is where I currently am. Going to close in 30 days. Non-recourse, 30 year debt at market rates. HUGE at improving cash in hand as well as cash flow. Protects my personal liability from my investments & protects me from rising interest rates with a locked in rate.
       
       FUTURE POSSIBLE STEPS:
12. Portfolio Loans for Purchase
13. Cross Collateralization Large Lines of Credit
14. HELOC (Home Equity Line Of Credit)
    1. I still rent where I live haha. Most people will do this much earlier.
15. Large Unsecured Line of Credit at Bank
16. Syndicate Commercial Money with Private Lenders on Big Money Deals
17. Unknown Unknowns

FYI I started out with $1,000 that I won from hitting a halfcourt shot at a Texas Tech Basketball game. I had nothing else except for sheer determination and a little bit of charisma. :D     Hopefully this helps at least one person.