How to raise money for investment property that requires small capital

Question

My question is How to raise money that requires $50000 or less in investment.

I have spoken to few lenders that i work with and all are ready to finance but their minimum loan amount is $50000 with a min. 20-25% down from my side.

I am very new to real estate investment and i am hasitant to buy home on cash.

What are my other alternatives?

I thought about asking for help from friends and family. I thought about working with other investor (but i being new in this business) its hard to raise money from individuals.

Sean OToole · Answer

Pretty sure @Kou Vang meant "convenience check", not "confidential check". Almost all credit cards offer convenience checks as a way to use the available credit with vendors that don't accept credit cards.

Kou Vang · Answer

Oh I forgot to mention, if you don't sell you will probably be blacklist on your lender, your score will suffer and your cat will probably be hungry for a while. ;) just saying but best of luck and keep us posted :)

Joshua Clark · Answer

One thing I have learned from the people on BiggerPockets is that if you have found a great deal, the money will come. Don't be afraid to seek out other investors if you have a great deal, especially if those investors are in your area. You can split the deal with them if they finance it at whatever split is mutually equitable (50/50, 60/40, 80/20). You could be willing to take the smaller cut depending on what type of other value you bring to the equation. You'll make a little money on the deal, get advice and guidance from a seasoned investor, and then use that money to fund your next deal. You will also start to build your reputation as an investor this way.Asking your family to invest isn't a bad idea either. Just make sure you let them know you are serious and this is your business, not a hobby. Present the deal to them, explain why it is a deal if they are not real-estate minded, and give them reasonable terms on their investment.For other ideas you can type "creative financing" in the search box and there are a lot of forum posts covering the different options. Also, check out the podcasts if you haven't, there are a few that cover this subject.I wish you the best!

Pratik Desai · Answer

I called to check with my credit card company. They can offer 0% introductory rate and i have one year to pay it back but there is an upfront fee of 2.5% or so. They can send me check and i could use it immediately or they can deposit in my account as @Dawn Anastasi mentioned in her post.If somebody plans to apply for mortgage, this may not be a good option as it will immediately show up on a radar as a big debt.Person on the phone was not able to tell me anything about confidential check though.

Royce Talbo · Answer

@Kou Vang can you explain to me how this will work? I dont know what a confidential check is. Any big amount that is deposited in the last 2 months will be questioned, so if it is confidential or not the bank will find out. They will also pull your credit score and see that you have 10,000 debt on your credit card, which will put you in a worse position to qualify for the loan. Sure you could age the funds in the bank but then you have to pay the interest, but that still doesnt eliminate the debt when they pull your credit. typically this wouldnt work, but for someone that has excellent credit score and high enough income to outweigh the amount they are getting from the credit card, this could work. If this is the case then why not do what @Dawn Anastasi said and just ask for the cash advance and do a direct deposit?

Dawn Anastasi · Answer

Credit card companies also have the ability to directly deposit money to your bank account electronically rather than having to write/deposit a check as well.

Jon Holdman · Answer

Not sure what a "confidential check" means but credit card companies often offer checks you can write to yourself or someone else. You can write one of these to yourself, deposit it in your bank account and then use the money for whatever you want. Watch out for the terms. Sometimes these have good terms, such as 0% or a very low rate for a year or so, though they often have an upfront fee of 3-4% of the amount of the transfer. Sometimes they're treated like cash advances.

Sheila Villacampa · Answer

Kou Vang Can you explain to me how a confidential check works? Say I have 8k credit limit and allowable cash advance is1.5k. Is it only the 1.5 k or the whole amount that I can convert to a confidential check? Very interesting idea?

Kou Vang · Answer

Do you have a credit card? If you do, Call them and ask for a rise, then get a confidential check from your credit card and write the check under your name ;) now you have 10-30k in your bank. Then go get that 50k loan, and then you should have 60-90k in your account :) use 50k to buy/flip, and use the rest to pay the monthly payment from The loan and credit card until you sell the house., then you should get 30-40 profit and pay off everything, and ta da :) free house with no use of your money at all and your credit score rise :))But course you need a high enough credit card or lots of cards ;)

Brandon Hopkins · Answer

You should start with one and prove you can make a profit. Investors will line up to give you money at that point. You now mentioned being a PM, investing and PM are very different areas of expertise.