“You’ll find the Money”

“You’ll find the Money”

Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes

I'm in the beginning stages of my real estate investing, currently have one rental property and I hear constantly whether it be podcast, YouTube videos etc. if you find a great deal, you'll have no problem finding the money to purchase. Am I taking this to literal when I think that people get these properties under contract and then find the funds to purchase after? My biggest goal for my next property is to successfully complete the BRRRR strategy because I believe that will help me scale greatly. I'm coming across property's between 80-90k that I believe have some sweat equity built into the deal, just looking at comps, and would love to get them under contract but don't have the capital for an all cash purchase. So back to my previous question, do some buyers get them under contract first and then find the funds? I believe it could be a pretty motivating way to really hammer down and make the deal happen but also seems like a great risk and may be not an ethical way to go about the process. Look forward to all responses, thanks.

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Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y

I agree with you that it's not exactly ethical to enter into a contract that you do not have a reasonable belief you'll be able to perform on. 

Find the money now. That's not to say you need to have it in your account, but know where it's going to come from. Talk with potential investors and/or lenders to get genuine interest.

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  • Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    4y

    I agree with you that it's not exactly ethical to enter into a contract that you do not have a reasonable belief you'll be able to perform on. 

    Find the money now. That's not to say you need to have it in your account, but know where it's going to come from. Talk with potential investors and/or lenders to get genuine interest.

  • Lucas MartinezBusiness Member
    Developer · Santa Barbara, CA · Member since 2021 · 81 posts · 48 votes
    4y

    @Tim Sipowicz

    Their point is that if you put in the legwork to find a great deal, you will be able to find investors to back it. If you're talking about just finding a "deal" on the MLS, then finding people to go in on it with you, that's not what they're talking about. Investors have seen all the properties on the MLS. But if you find a great off market property and can explain the numbers, you should be able to find investors who agree that it's a good deal.

  • Phoenix, AZ · Member since 2021 · 504 posts · 282 votes
    4y

    Good perspective from @Lucas Martinez. They are investing because they want access to the opportunity you have sourced.

  • Joshua JanusBusiness Member
    Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes
    4y

    Hey @Tim Sipowicz. I cold call non owner occupied 1-4 units every day and have found sellers willing to sell at 70% ARV. I take these deals and take them to an investor, they buy it and I get a small commission. I'm trying to do this over and over so I can eventually buy one of the properties myself with the compounded commission. Hope this helps, Josh

  • Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes
    4y

    @Taylor L. Thanks, that makes sense. I have some possible private lending that I may be able to tap into so I’ll start those discussions and try to line up the capitol before making offers.

  • Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes
    4y

    @Joshua Janus so you’re going the wholesaling route to build up the funds? That’s awesome. I’m going to dive into prop stream more and start making those phone calls myself. Good luck to you and thanks for the response.

  • Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes
    4y

    @Lucas Martinez understood. The " deals" on the MLS have been picked through for sure but surprisingly there are still a few left with some meat on the bone. I agree tho, with some of these properties I come across what I think would be a deal at a lower than asking price. Someone has already offered 5k over asking. I need to scour the off market scene a bit more I believe.

  • Jon KellyPro Member
    Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
    4y

    @Tim Sipowicz It doesn't matter if it's before or after you're under contract. if you have a good deal you will be able to find interested investors. 

    If you're under contract and you're unable to close then your reputation as an investor will take a hit. The agent/broker you're working with will be reluctant to work with you in the future. 

    The whole point of the quote is encouraging people to take action. It's one less excuse you should have before going to find deals. 

  • Rental Property Investor · Beaufort, SC · Member since 2020 · 119 posts · 98 votes
    4y

    @Tim Sipowicz

    You will find the money, sounds crazy, but all the work you put in to find a great deal, do that same amount of work to find the money for said deal.

  • Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes
    4y

    @Jabbar Adesada I like that viewpoint. What better motivation to find the money than having a 100k contract in your hand, no excuse but to get that money for the deal.

  • Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes
    4y

    @Jon Kelly makes perfect sense. Like stated before, money doesn’t have to be in the account but would be a much better situation if I knew 100% where its going to come from. My word means a lot to me, would hate to ever terminate a contract over not having the funds lined up, seems dishonest. Thanks a lot for the input.

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