Great Deals, but I'm Broke! How to Attract Financial Investors?

[John Tyler]

So, I've been browsing the MLS for some weeks, now. I've viewed some decent deals and some great deals, but there's a common trend: I don't have enough money for these deals! I'm curious to hear how the BP community goes about finding and building relationships with individuals that can fund deals. I have a deal right now that I want to jump on, but without the cash, it's simply impossible. I would be more than thrilled to hear from the community about your strategies for finding lenders. THANKS!

[Nick B.]

@John Tyler,

$12K is plenty if you indeed find a good deal. 

For example, let's say that houses sell for $130K and rent for $1300/mo in a particular area. 

You find a fixer-upper in that area for $60K that needs another $30K of work and $5K for closing costs, etc. A hard money lender would loan you 70% of ARV or $91K. You need to come up with $4K out of pocket to do this deal.

Once you finished the rehab, refinance out of hard money loan into 30 yr fixed. If you manage to get 75% loan to value at refinance, you will receive $6K in loan proceeds after you've paid the hard money loan. 

Oh, and don't forget to rent this house for $1300/mo. This should make you $400-500/mo in net cash flow.

Nick