What’s going on guys and gals . I’m a young gentleman who just got out the marine corps and I am ready to take on the real estate investing life . I did a lot of studying and took notes while in the military and now I wanna take charge and get started . I’m all alone so I don’t have people that’s already in the game holding my hand and showing me the way but anyways one of my main questions is what is the best or most common way to get the money for my first piece . I know I can do hard money loans but the fees are crazy . I know I can ask a family member but no ones got loaning money, I asked . I only got 3,000 to my name and my goal is to buy a foreclosed home and rehab it then sell it for profit .
Indianapolis, IN · Member since 2019 · 39 posts · 25 votes
6y
@Steven Leonardi Hi! Where do you plan to invest? Also, @Will Barnard and @John Thedford are correct. It's hard to get a HML on board with issuing a pre approval if you have less than $15k in liquid assets. I work for a HML and we love to fund deals for new investors and experienced investors. My advice to you is to get some more money in the bank before you consider a HML. The reason is because most HML won't fund your closing costs and they won't pay the 10-20% to your contractor to get the rehab started. A PML would be better if you must jump on a deal before having more money in the bank because the terms are usually negotiable with a PML. [Solicitation Removed by Moderators]
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
6y
If the foreclosure is CHEAP enough and there is plenty of safety you might be able to find a HML. However, most lenders are going to want skin in the game. If you are new and have no track record don't be surprised if they want 20% down. That is pretty common. I don't want to discourage you but keep in mind that in most cases it takes money to be in the real estate game. That doesn't mean it has to be your money but you must find someone with money and faith to go into the deal.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
6y
As John stated, it will not be easy with no experience and needing 100% funding. $3k is not enough to get started in this business typically and getting 100% financing including holding costs is going to be very very difficult. You can get a HML and a money partner for the rest or a private money lender. If you have no family or friends for this, you will need to find someone else. If you actually find a real deal with a real spread (which is half the battle these days, then you will have a better chance if you bring that deal to an experienced rehabber who can cut you in to a piece of the pie. I would expect to take less profit in exchange for following the deal along from start to finish so you get on the job training with a paycheck at the end, a perfect world. Once you have some capital raised up, you can then go about it on your own.
Yes, hard money is not cheap but it is not the cost of the money that is the most important, it is access to the money that is important. So long as you have a real deal, you will need to pay the costs and fees for access to that OPM (other peoples money) so you can get a paycheck. 100% of zero is much less than 25% of something.
Indianapolis, IN · Member since 2019 · 39 posts · 25 votes
6y
@Steven Leonardi Hi! Where do you plan to invest? Also, @Will Barnard and @John Thedford are correct. It's hard to get a HML on board with issuing a pre approval if you have less than $15k in liquid assets. I work for a HML and we love to fund deals for new investors and experienced investors. My advice to you is to get some more money in the bank before you consider a HML. The reason is because most HML won't fund your closing costs and they won't pay the 10-20% to your contractor to get the rehab started. A PML would be better if you must jump on a deal before having more money in the bank because the terms are usually negotiable with a PML. [Solicitation Removed by Moderators]