Purchasing a Rental for College Students

[Joshua Randall]

There are multiple homes in a D1 college town that are 4/2, $127,000 purchase. I've looked at comparable rents in the area for college students and they sit between $365-425 per room rented. To put 20% down I would need $25,000. But I do not have that type of money to invest at the moment. 

If you were in my shoes how would you find the money to get these two investment properties. They are incredible deals and would give me the momentum to get the ball rolling in my real estate investing. 

[Mathew Pezon]

Quote from @Joshua Randall:

There are multiple homes in a D1 college town that are 4/2, $127,000 purchase. I've looked at comparable rents in the area for college students and they sit between $365-425 per room rented. To put 20% down I would need $25,000. But I do not have that type of money to invest at the moment. 

If you were in my shoes how would you find the money to get these two investment properties. They are incredible deals and would give me the momentum to get the ball rolling in my real estate investing. 

Hi Joshua,

Finding yourself eyeing up a killer deal without the cash upfront is a spot many of us have been in, so you're definitely not alone in this. Here are a few creative ways to round up that down payment you might consider:

Team Up: How about finding a partner who's as excited about this opportunity as you are? Splitting the investment (and profits) could make it easier on both your wallets and kickstart your real estate journey. The Bank of Family and Friends: Sometimes those closest to us can be willing to back our ventures, especially when we're as passionate as you sound. Just make sure any money exchange is well documented to keep things smooth down the line. Leveraging Other Assets: If you've got equity in another property, a Home Equity Line of Credit (HELOC) could be a way to tap into that without selling up. Look for Private Lenders: They're out there and often more flexible than traditional banks, though the interest might be higher. If your deal's as sweet as you say, it could well be worth it. Crowdfunding: Ever considered it? Platforms out there let folks invest smaller amounts in real estate projects. It's a way to pool resources and get that investment moving. Seller Financing: This one's a bit of a long shot, but if the seller's keen to move quickly, they might just finance the deal for you.

And here's a crucial strategy to add to your arsenal: aim to purchase the properties at least 15% below market value. Not only does this approach give you instant equity, but it also positions you well for a refinance. After you've improved the property and increased its value, refinancing can potentially allow you to pull out most, if not all, of your initial investment. This strategy can set you up for the next investment without depleting your resources.

Every option has its ups and downs, so weigh them carefully. You've got a great eye for spotting an opportunity – now's the time to harness that creativity for finding the funds. You got this!

Best of luck, and here's to hoping those properties soon have your name on them!

Cheers!