buying first property
chicago, IL · Member since 2018 · 41 posts · 17 votes
buying first property
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Specialist · NJ · Member since 2022 · 1k+ posts · 649 votes
1yThis industry is a double edged sword. It is also unforgiving and it will punish those entering before they are ready. There's paradise here, but also disaster. I'm sure for every success story there's 100 disaster stories.
Entering with no money, no track record, no knowledge and looking to do a flip is a bit of a dream. What are you bringing to the table if none of the above?
In a small market in the midwest, somewhere in western PA through Indiana you can get into a house for under 100k and with 75k - 90k in work that house can be worth 270k - 290k. That opportunity is there in places like Pittsburg, Columbus, Toledo, Springfield, Dayton, Fort Wayne, Indianapolis. But to see a project through it's entire lifecycle 6 - 9 months, you'd need to absorb 40k - 50k in costs and fronting money. And if you do not have the proper money to see the project to the end then you'll get stuck and just be paying loan payments with the balloon payment looming over your head.
A zillion things can go wrong, financing is the least of the worries of an investor. The real problems come in the rehab and the exit. If the rehab isn't up to par then you can't get your exit, if the rehab is good and the market is soft you can't get your exit. You'll have a property be sitting for 45 days and you'll start the reducing game.
Also, very few agents present real comps, wholesalers almost never do. They show you top of the line comps only. So it is easy to fall into a project and then once you're in the middle of it and it has gone sideways, only then realize what a mistake you made but it is too late. There's waaaayyyyyyy more of those stories then there is of ppl coming in with no money and getting in and out of a flip with oop and making like 25k. The ladder belongs in a Disney Fairy Tale book somewhere in between Snow White and Cinderella.
22 Replies
- 1yMark UpdegraffBusiness MemberReal Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 690 votes
Welcome to the community! You’re in the right place, and it’s great to see your enthusiasm about getting started in real estate investing. I’ve been in this business a long time, and I know firsthand how overwhelming that first deal can feel—especially when it comes to financing. But the good news is, you don’t need to have all the answers right away. You just need the right plan and the right people in your corner.
A little background on me—I’m a real estate broker, investor, and developer out of Rochester, NY. I built my business from the ground up, and over the years, I’ve worked with first-time investors, seasoned pros, and everyone in between. I specialize in investment properties, high-end homes, and commercial real estate, and I run Updegraff Group Realty, a full-service brokerage that helps investors not only find and fund deals but also manage construction, optimize returns, and scale their portfolios.
Financing Your First Deal Without Using Your Own Money
It’s a common question, and the truth is—it’s very doable, but it requires strategy and relationships. Here’s a breakdown of the main ways investors fund their first deal while minimizing their own cash outlay:
1. Private Money & Hard Money Loans– These lenders focus more on the deal than on your personal finances. If you can show that the numbers work, you can get 100% of the purchase and rehab covered.The key is finding lenders who work with new investors.
2. Partnering with Experienced Investors– If you don’t have capital, you can offer your time, effort, and hustle in exchange for a piece of the deal. Many experienced investors are willing to partner if you find the right property and do the legwork.
3. Seller Financing & Creative Deals– Some sellers will carry the note, allowing you to buy with little or no money down. This works best when the seller is motivated and open to flexible terms.
4. BRRRR Strategy (Buy, Rehab, Rent, Refinance, Repeat)– If you find the right undervalued property, you can finance the rehab with short-term funding and then refinance into a long-term loan, pulling most or all of your money back out.
5. House Hacking– If you’re open to living in your investment, you can use an FHA loan (as low as 3.5% down)to buy a multi-unit, live in one unit, and rent out the others. This gets you in the game with minimal upfront costs.
Covering the Smaller Costs (Inspections, Appraisals, Earnest Money, etc.)
Even when using other people’s money, you’ll need some cash for earnest money deposits, inspections, and carrying costs. Here’s how to handle those:
• Negotiate inspection costs into your deal—in some cases, sellers will cover them.
• Work with lenders that roll fees into closing costs(some hard money lenders do this).
• Use business credit or 0% interest credit cards strategically—just be careful with repayment timelines.
Next Steps
The biggest thing you can do right now is surround yourself with experienced investors, agents, and lenders who have done what you’re trying to do. The fact that you’re here shows that you’re serious about learning and growing, and that’s half the battle.
If you’re looking for real, practical guidance, I’m happy to help. I know what it’s like to be in your position, and I believe in paying it forward. If you want to talk strategy, analyze deals, or just get some honest insight, feel free to reach out. Looking forward to seeing you take that first step and get your first deal done!
Updegraff Group Realty4.746 Reviews - Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes1y
Quote from @Veronica Calvillo:
Hello! Looking to connect with like minded individuals that I can learn from and possibly do business together. I'm from Illinois and am itching to do my 1st real estate investment but not sure how a newbie like myself can finance a property without using my own money especially when it comes to paying for inspections, appraisals, earnest money, monthly interest and monthly bills, etc
Do you not have any of your own capital to get started? If not, maybe you can partner with family or friends. If you do find a money partner, expect to do all of the sweat equity and manage the deal.
- Real Estate Agent · Memphis, TN · Member since 2024 · 250 posts · 71 votes1y
Welcome to BP!
My biggest advice - take your time, do your research, and consider hiring a mentor.
Check out the Rookie Podcast and forums on BP; you'll gain a lot of valuable insights from them.
Wishing you success in your investing journey!
- Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes1y
As a newbie I would not go into this space without money. You need to save money, learn and network. Once you have a financial base then invest. House hacking is the easiest way to get into the door. If you had experience, capital and deals then it'd be different.
- 1yWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
It's fantastic that you're diving into real estate investing! From my experience working with over 400 investors, financing your first deal with minimal out-of-pocket expenses is entirely possible, you just need the right strategy. Consider house hacking by purchasing a multi-family property with an FHA loan, or explore creative financing options like seller financing or partnering with private lenders. The BRRRR strategy can also help build your capital base without significant upfront costs. Look into Illinois first-time buyer programs for potential grants, and think about leveraging business credit once you're established.
Good luck!
NETWORTH BUILDERS5236 Reviews - Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes1y
Hello there @Veronica Calvillo - Getting into the real estate game may be easier than you think!
Do you have a specific area of Chicago where you would like to live? In my opinion, the easiest path to investing in real estate is house hacking a 2-4 unit multi-family property.
You have the right idea of getting around other like-minded investors. I suggest checking out some of the meetups on BPs meetup page:https://www.biggerpockets.com/forums/521-real-estate-events-...
I also have a list of all the other Chicago meetups that I can share with you.
Quality Builders4.966 Reviews - Member since 2025 · 25 posts · 9 votes1y
Welcome to the real estate hive Veronica.. are you open to exploring off-market listings through your network?
- Property Manager · Member since 2022 · 28 posts · 24 votes1y
Hey- We also love the IL and specifically Chicago market, here are a few ideas for you:
1. Hard Money Loans
- Short-term, asset-based loans from private lenders.
- Typically 70-85% of ARV (After Repair Value), but come with higher interest rates (8-12%).
- Best for fix-and-flip deals or BRRRR (Buy, Rehab, Rent, Refinance, Repeat).
2. Private Money Lender
- Individuals (not banks) lending based on relationships and trust.
- Can negotiate flexible terms with little to no money down.
- Great if you build a network of investors willing to fund your deals.
3. Seller Financing (Owner Carry)
- The seller acts as the bank, letting you make payments directly to them.
- Little to no money down in some cases.
- Works well for motivated sellers or properties with no mortgage.
4. Subject-To & Lease Options
- Subject-To: Take over the seller’s existing mortgage payments.
- Lease Option: Rent with the right to buy later, often with rent credits.
- Can acquire properties without a big upfront payment.
5. Partnerships & Joint Ventures (a great option for you)
- Partner with an experienced investor who funds the deal while you handle operations.
- Split profits based on an agreed percentage.
- Great way to learn hands-on while minimizing personal financial risk.
Would you be interested in connecting with local real estate investor groups in Illinois? I can help find meetups or forums where you can network with potential partners!
- 1yGeorge SkidisPro MemberRental Property Investor · Belleville, IL · Member since 2017 · 875 posts · 529 votes
Join Jane Garvey's real estate club. She Runs the Chicago Creative Investors Association (CCIA). They just sponsored a Cash Flow 101 Game night and had great turnout.
- Real Estate Agent · Chicago · Member since 2021 · 168 posts · 62 votes1y
Hey Veronica! It’s great to see your enthusiasm for getting into real estate investing! Since you're in Illinois, we might be able to connect and share insights. As a real estate agent, I’ve worked with investors and can tell you there are definitely ways to finance deals without using much (or any) of your own money.
A few options to explore:
- Hard Money Lenders – They cover most of the purchase and rehab costs, though interest rates are higher.
- Private Lenders – Networking with people who want to invest passively can be a game-changer.
- Seller Financing – Some sellers are willing to finance deals, reducing upfront costs.
- JV Partnerships – If you find a great deal, you can partner with someone who funds it while you handle the operations.
- Wholesaling – This can help you build capital without needing to own properties.
If you’re serious about getting started, let’s connect and talk strategy! There are definitely ways to make it happen without draining your own funds.
- Specialist · NJ · Member since 2022 · 1k+ posts · 649 votes1y
This industry is a double edged sword. It is also unforgiving and it will punish those entering before they are ready. There's paradise here, but also disaster. I'm sure for every success story there's 100 disaster stories.
Entering with no money, no track record, no knowledge and looking to do a flip is a bit of a dream. What are you bringing to the table if none of the above?
In a small market in the midwest, somewhere in western PA through Indiana you can get into a house for under 100k and with 75k - 90k in work that house can be worth 270k - 290k. That opportunity is there in places like Pittsburg, Columbus, Toledo, Springfield, Dayton, Fort Wayne, Indianapolis. But to see a project through it's entire lifecycle 6 - 9 months, you'd need to absorb 40k - 50k in costs and fronting money. And if you do not have the proper money to see the project to the end then you'll get stuck and just be paying loan payments with the balloon payment looming over your head.
A zillion things can go wrong, financing is the least of the worries of an investor. The real problems come in the rehab and the exit. If the rehab isn't up to par then you can't get your exit, if the rehab is good and the market is soft you can't get your exit. You'll have a property be sitting for 45 days and you'll start the reducing game.
Also, very few agents present real comps, wholesalers almost never do. They show you top of the line comps only. So it is easy to fall into a project and then once you're in the middle of it and it has gone sideways, only then realize what a mistake you made but it is too late. There's waaaayyyyyyy more of those stories then there is of ppl coming in with no money and getting in and out of a flip with oop and making like 25k. The ladder belongs in a Disney Fairy Tale book somewhere in between Snow White and Cinderella.
- Real Estate Agent · Indianapolis IN · Member since 2022 · 144 posts · 65 votes1yVery well said!!
Quote from @Mike Klarman:
This industry is a double edged sword. It is also unforgiving and it will punish those entering before they are ready. There's paradise here, but also disaster. I'm sure for every success story there's 100 disaster stories.
Entering with no money, no track record, no knowledge and looking to do a flip is a bit of a dream. What are you bringing to the table if none of the above?
In a small market in the midwest, somewhere in western PA through Indiana you can get into a house for under 100k and with 75k - 90k in work that house can be worth 270k - 290k. That opportunity is there in places like Pittsburg, Columbus, Toledo, Springfield, Dayton, Fort Wayne, Indianapolis. But to see a project through it's entire lifecycle 6 - 9 months, you'd need to absorb 40k - 50k in costs and fronting money. And if you do not have the proper money to see the project to the end then you'll get stuck and just be paying loan payments with the balloon payment looming over your head.
A zillion things can go wrong, financing is the least of the worries of an investor. The real problems come in the rehab and the exit. If the rehab isn't up to par then you can't get your exit, if the rehab is good and the market is soft you can't get your exit. You'll have a property be sitting for 45 days and you'll start the reducing game.
Also, very few agents present real comps, wholesalers almost never do. They show you top of the line comps only. So it is easy to fall into a project and then once you're in the middle of it and it has gone sideways, only then realize what a mistake you made but it is too late. There's waaaayyyyyyy more of those stories then there is of ppl coming in with no money and getting in and out of a flip with oop and making like 25k. The ladder belongs in a Disney Fairy Tale book somewhere in between Snow White and Cinderella.
- San Diego, CA · Member since 2024 · 88 posts · 67 votes1y
Hello Veronica! So excited to have you here.. have you tried any interesting apps or tools to track potential properties?
- Rental Property Investor · Italy · Member since 2025 · 12 posts · 2 votes1y
I'm a beginner too, I've been informing myself around for a year. However, I have never taken my first home yet. In practice, I've been running around in circles for 3 or 4 months. Unfortunately I am bound by the fact that I am a foreigner but I would have a capital to invest under 20k. I have networked and met many people, investors, Lenders, real estate agents, property managers and general contractors. But I can't find a partner in America to dive in
- Real Estate Agent · Indianapolis IN · Member since 2022 · 144 posts · 65 votes1yHey. I can see that this would be a challenge. Especially since 20k is not much skin in the game for a partner to take you on. My suggestion would be to keep saving more capital. There are quite a few FB groups that may be of help to gain others perspective about investing from outside the US. I have had a lot of non-US investors throughout the years. But they have had more capital and a US LLC set-up.
Quote from @Omar Ciam:
I'm a beginner too, I've been informing myself around for a year. However, I have never taken my first home yet. In practice, I've been running around in circles for 3 or 4 months. Unfortunately I am bound by the fact that I am a foreigner but I would have a capital to invest under 20k. I have networked and met many people, investors, Lenders, real estate agents, property managers and general contractors. But I can't find a partner in America to dive in
- Rental Property Investor · Italy · Member since 2025 · 12 posts · 2 votes1y
.Thank you for the answer, can you recommend me some groups on Facebook where I can look.
In theory, with a partner in the United States, I would have split the investment of the brrrr. I know some lenders who offer 90% for purchase and 100% for renovation
- 1yGeorge SkidisPro MemberRental Property Investor · Belleville, IL · Member since 2017 · 875 posts · 529 votes
Quote from @Omar Ciam:
.Thank you for the answer, can you recommend me some groups on Facebook where I can look.
In theory, with a partner in the United States, I would have split the investment of the brrrr. I know some lenders who offer 90% for purchase and 100% for renovation
Omar. If you complete your profile with city and state where you are located the responses you get my be more specidig or direct you to the right contacts.
- Rental Property Investor · Italy · Member since 2025 · 12 posts · 2 votes1y
Quote from @George Skidis:
Quote from @Omar Ciam:
.Thank you for the answer, can you recommend me some groups on Facebook where I can look.
In theory, with a partner in the United States, I would have split the investment of the brrrr. I know some lenders who offer 90% for purchase and 100% for renovation
Omar. If you complete your profile with city and state where you are located the responses you get my be more specidig or direct you to the right contacts.
Ok thank you done😊
- Real Estate Agent · Indianapolis IN · Member since 2022 · 144 posts · 65 votes1y
Quote from @Omar Ciam:
.Thank you for the answer, can you recommend me some groups on Facebook where I can look.
In theory, with a partner in the United States, I would have split the investment of the brrrr. I know some lenders who offer 90% for purchase and 100% for renovation
@Omar Ciam you can just search "foreign investors group" on FB and quite a few groups should pop-up. Just look carefully for ones that are a good fit for what you are looking for.
- Real Estate Coach · Chicago, IL · Member since 2020 · 171 posts · 64 votes1y
Hey! Love that you're putting yourself out there and looking to take action—that’s honestly the most important first step. I totally get where you’re coming from. When you’re just starting out, it can feel like there are a million little costs that add up before you even get the keys. But the good news is there are creative ways to get in the game, even with limited upfront capital.
I work with new investors here in Illinois (I’m based in Chicago) and help them map out beginner-friendly financing strategies like:
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Partnering up (bringing in someone with capital while you bring hustle and time)
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Using seller credits and lender-paid closing options
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House hacking with low down payment loans (FHA, conventional 3–5%, etc.)
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Tapping grants or down payment assistance programs
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Structuring deals that include rehab costs or defer early expenses
If you're willing to learn and hustle, there's always a path forward—and I’d be happy to chat, answer your questions, or walk you through what that first deal could realistically look like. I also offer coaching and deal support tailored for beginners, so feel free to DM or reach out if you want to dive deeper!
You’ve got the mindset—it’s just about building the right plan and network now.
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