Financing Off-Market Deals

[Adam Kayne]

Hi all - I am looking to buy my first rental property over the next few months. I work full time and have a salary but live in a college town where it is very difficult to find any deals listed on market. I've talked with local investors and they recommend searching off-market. I have roughly $20K in cash, so can close with a 3-5% down payment for a loan. My question is can I use an owner-occupied loan for an off-market property? I am unsure if I should be looking for investors to partner with who can front more capital on potential deals or if I am able to go in alone. Any advice helps, thanks!

[Shiela R.]

Sure thing @Adam Kayne! So always check with the lender but that is my understanding of an OO loan (you have to OO for 12 months).

I get it!  If you are used to living with the amenities and close proximity and vibe of your town, then you want what you want :) This could be quite a challenge, unfortunately.  I would suggest finding the deal and bringing in a money partner.  One of my first deals, I did this.  However, it was a more even market; not the sellers market that many of us are living in. 

To clarify when I say "an investor is going to want a deal", I'm referring to an investor who would partner with you to purchase. Or rather, a money partner. They're only going to want to get in if the place cashflows.   Keep in mind you need to bring something to the table.  If it isn't money or credit, do you find the deal?  Will you manage the place?  Be creative!  When you look for the deal think like a wholesaler.