Looking for some advice. I would like to begin my career in real estate investing. I hear a lot about using other people's money to get started. However, there is a lot of information stating that I can't expect to be given money with no experience and bringing nothing to the table.
Funding is the only thing prohibiting me from getting started. DTI is ok and I have a good relationship with my local financial institution. However, I have no savings and it would take quite a while to save 20% for a decent property.
Has anyone else been in this situation? Looking for advice on getting funding to get started. Thanks.
Money will come if you find the deal. Money...easy. Finding deal..hard. Forget about money until you have the deal. Oh, and money is not at a bank.
I'm quickly realizing this. Hitting the networking hard. I'm thinking wholesaling maybe the way to go. Marketing will be key as well.
I just closed my first deal and yes I had to go through a bank. You have to think why would someone give you money with no experience when they can go out and do the same thing. You have to find that ‘why’ factor of what you can bring to the table. Unfortunately for my first time deal I went the traditional route and put my money where my mouth is so that later down the road I can tell my story to other investors and they’ll know if I’m willing to risk my own money then I’ll have more of a chance securing funds since I’ve been through the process before.
I would suggest saving some money and using your own the first time around so you really feel the risk/reward before trying to use other people’s money, if that’s even possible. Wishing you the best of luck on your first deal!
A couple of things:
Attend Real Estate Investment Meetings (REIA), meetups, etc. Connect with other people who are interested in the same thing. Networking is how you find other peoples money. You may need to partner on the first one or two to build your credibility. Partnering is a great way to start. Make sure if you partner the agreement is in writing. Use an attorney to draft the document. The key is networking.
It is a fallacy to believe you can get into real estate investing without cash. 95% of investors fail, the major stumbling block is lack of cash.
It may take a long time but you must adjust your life style and save up the cash to begin investing. Get a second job, cancel wasted unnecessary items like cell phones and cable TV. Reduce your expenses by living a more frugal life style.
Instead of trying to get into real estate with no cash adjust your thinking and save it yourself.
I'm on the path to being more frugal...I'm working 3 jobs now but feel like I can't get ahead and that's why I was turned on to real estate. I hardly ever see my wife and kids and that's my "why". I wanna have the freedom to work only one or zero jobs if I choose. Just trying to work out a system. Wholesaleing is appealing simply because I only need to find a deal and then find someone else with money. However, I'm in ohio and heard wholesale in my state can get you into some unfavorable legal situations due to it being considered brokering without a license.
Kenneth is 100% on the mark. Go to a REIA and find a partner who does have money. Even if you only get a 25% cut.