How are investors structuring deals when they have great credit but limited cash?

Question

I’ve been running into a lot of investors lately who have good credit, a stable income, and want to build a rental portfolio — but not much capital to get started.

What’s interesting is that many of them could qualify for hard money or short-term leverage, but they either don’t know how to structure the deal safely or they’re unsure how to roll that into long-term financing without getting stuck.

I’m curious how others here approach this:

• Have you helped (or been) an investor who started with good credit but little cash?
• What creative financing structures actually worked long-term?
• Any pitfalls to avoid when trying to scale this way?

Have you helped (or been) an investor who started with good credit but little cash?

What creative financing structures actually worked long-term?

Any pitfalls to avoid when trying to scale this way?

I’ve been involved in a few projects like this and have seen both success stories and some pretty rough lessons learned, so I’d love to hear how others are making it work in today’s market.

Andrew Postell · Answer

@Camren Berry this is the problem and the BRRRR Method solves.  That's the whole point it exists.  I mean, it's also the point of "Subject To", "Loan Assumptions", "Owner Financing", etc.  NONE of us have unlimited money.  Even if you have $1million....your limit is just higher than mine - you still have a limit!

I started out with $4,000.  I have 15 properties now.  And I'm nothing.  There's PLENTY of examples of people who have done much better than me.  There's also more examples of people who didn't do it well.  Since you are posting this in the BRRR Method forum...I'm assuming you might be interested in this technique?  Maybe?

Here's some tips:

BRRRR SKILLS NEEDED

Generally speaking you will need several things to successfully complete a BRRRR:

• ARV - being able      to calculate the Value on your own (meaning, without the wholesaler      telling you the value) is really important.
• Repairs - You will likely      need to know how to budget the repairs as well.  Getting a      contractor can be extremely frustrating especially if you need to make an      offer without even looking at the property.  How do you calculate      repairs without a contractor?  You may need to lean on other      local real estate investors in the beginning.  Or maybe even      just focus on properties with a very light rehab?
• Lenders - You will need a      lender on your BUY step and on your REFINANCE step.  And I would      HIGHLY recommend to read this article I wrote for Bigger Pockets on      how to find good lenders that you can find HERE. If they are good, they should be      absolutely definitive on rate, terms, costs, etc. Trust me, many lenders      will tell you they can do this...but it's very rare to find. When I first      started BRRRR'ing my properties lenders would tell me "That's illegal"....it's      not, they just didn't know anything about it.
• Finding Properties - and this is the      absolute hardest step of anything right now.  So network like crazy      and find some good resources.  It's going to be hard...but if it were      easy then anyone could do it.

Some notes on the 2 most critical steps to me:

• How to calculate      After Repair Value (ARV)
• How to calculate      Rehab Costs

And it's not so easy to understand.  People spend HOURS of training on this subject and there are plenty of horror stories of people who purchased homes...and didn't do ANY math before they bought.  So at least you are trying and you will get better at it.

So, how can you get better at estimating ARV? Treat this like college. It takes some people 4 years to get through college (and sometimes longer) so we aren't going to take just 1 class and call ourselves experts. We need to take multiple "classes" and become the SMARTEST person on this subject. Here's some ideas:

• Lean on your      Lender - a good lender can show you how to estimate ARV.
• Lean on your      Appraiser - ask your appraisers what they did.  Maybe even ask      them if there's any training they could suggest for you.
• Lean on your Title      Company - Title companies will often give free training, designed for real      estate agents, on this subject.  Ask if they have anything coming      up...if they don't, ask them to host one!
• Lean on your local      Real Estate club - I don't know if you have any close to you but I lean      HEAVILY on my REI clubs for this. They often will have sessions      on this subject.
• Bigger Pockets? -      Do they have any tools?  They have an entire forum on this      subject.  Maybe ask this same question in there?
• YouTube? - It's      got everything else, why not this?
• And ASK - What's      the impact of a pool?  Windows?  Bathrooms?       Granite vs. Laminate?  Where do I get the most bang for my buck?

How can you get good at estimating your renovation costs? - This one is going to be a little harder to do. I actually had a contractor provide me with his renovation calculator. I met this contractor at a REI club...because he was teaching a class on how to calculate renovations! Get with people who are smarter than you to make you smarter too.

Again, we need to get smarter than smart on this subject.  This is money.  YOUR money.  Get out there and get better.  You can do this and maybe one day you can even be teaching one of those classes. Who knows?

Elealeh Fulmaran · Answer

Yes, I’ve helped folks start with strong credit and thin cash by pairing short-term leverage with a clear, low-risk exit. What works: buy a real deal at a discount, fund purchase/rehab with private money or hard money only if you’ve pre-vetted your takeout (DSCR/conventional terms, seasoning, appraisal comps), keep repairs tight and value-add obvious, and hold 2–3 fallback exits (rent, mid-term, sell). Pitfalls: banking on future appraisals, underestimating carry, and loose timelines. Your next step: pick one buy box, line up a broker for takeout terms, and draft a one-page plan showing purchase, rehab, stabilized rent, and refinance path.

James Jones · Answer

Solid question Camren, I see this all the time. When someone has solid credit but limited cash, I like to structure deals using a private money + credit partnership model. Basically, one person brings the credit and experience, the other brings the cash for the down payment or rehab. You lock in short-term funding, force the equity through the rehab, then refinance in the credit partner’s name to pull the capital back out.

The key is protecting everyone on paper, clear JV agreement, recorded lien, and exit terms upfront. Done right, it’s a win-win that builds trust and lets both sides scale faster without getting overextended.

Ken M. · Answer

All of the projects I've helped involve investors with, used some cash, about half as much as is needed in a "traditional" house purchase. We just take over the loan. We get the lower interest rate, there is no loan origination fee, and typically we buy at 85% of what it would sell for on the MLS. There is not really a mystery to it, just good underwriting and knowing what the rules are.So, when you are new, looking for lenders & considering Fix & Flip, BRRRR, or rental, as a buyer, I’d ask the owner/seller to be one of my private lenders with creative financing. This works well in Southern  California (CA), AZ, WA, and TX.

Frankie Vozzi · Answer

Great topic, Camren we’ve been seeing a lot of this lately too. For investors with solid credit but limited capital, short-term leverage paired with a clear exit to DSCR or conventional financing can still work well, especially when the deal has strong equity or rental potential.

We’ve helped a few clients bridge that gap by structuring creative entry financing. Happy to share what’s been working deal-by-deal if that helps others here. I can walk you through a few strategies we’ve seen work really well in today’s market.

How are investors structuring deals when they have great credit but limited cash?

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