Funding

[Enrique Vance]

Hello, I live in the Tucson area and would like to start investing in real estate. I just bought a house for 106K and my loan officer said It was appraised at 120K (most of the like type homes in my neighborhood are selling for 140K) I would like to buy a second home or duplex to rent out, I make about 40K at my job so the bank will probably not loan me any money to invest. I thought about a hard money lender but I only have 3000.00 in savings and an 7000.00 in open credit through credit cards. Besides that, I'm a little hesitant as a newbie to be using hard money lending. Any suggestions as to how I should begin? 

[Justin Ellis]

Question. Is the house you just bought your primary residence or are you working on flipping that (or both). 

And from what I understand, hard money is really only for flips. You can use it in invest and hold scenarios to carry the property until you can get traditional financing however the interest rate will eat all of your cash flow if the deal is not strong enough, and if you don't get financed in a year, you'll lose the property (Plus from what I've heard from talking to a lender, you'll need 20-30% of your own money in the deal, plus a few points). I would suggest reading "The book on investing with no or low money down". In there you'll find some interesting strategies that can open your mind up to creative ways to begin without a lot of cash. My favorite, "The lease option sandwich"!

By the way, I'm just starting out myself so PLEASE don't take any of this as gospel! I'm in the Tucson market, we should connect.