College Student Frist Investment Help

[Ricky West]

So I am a 20 year old college student excited about my future of real estate investing...but I'm not good at sticking on the sidelines. I am working to analyze 5 properties per morning, but need some help. I work for 9.75/hour about 15 hours a week because I am a full time student. I am wondering if I had the down payment and closing costs, and all initial expenses, is it at all realistic that I would ever get prequalified for a 80-120k mortgage, if the numbers made sense? I find (according to what I'm learning on BP) some good deals, but according to some "affordability" calculators, feel that I'm never going to get the loan from the bank. What are my financing options? Am I wrong about the bank? Help.

Thanks

[Elvis Methoxha]

Hey Ricky,

I'm not a banker. I would stick to the #s! Here is what I would do in your case. 

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1. If I find a truly good deal, finding the funds is a lot easier. First, I would use the BP database and ask for investors looking to partner up or fund your project with a nice return on the loan (10-12% annually). 
2. If that doesn't work, I always have a backup list of family and friends that I could ask. I do not treat this as a "favor"; it is a business transaction. I would lay down my risk analysis, purchase price (MAO), repair value (RV), and current market value of the finished product (ARV). I don't find a need to show the profit margin. Then, if they agree to help, I have my silent/private investors ready and able to fund the deal. All I would need is a Letter of Intent and Proof of Funds from every private investor to put in along with my offer. (I would definitely recommend a real estate agent, they don't cost a penny to the buyer.)
3. Finally, if all fails, I start looking for a hard-money lender. These are private companies/individuals set up as a company to lend out cash, fast, at high interest rates (10-15% annually on avg.) with a minimum of X months of interest to be paid regardless of how quickly you flip and sell the home. Some may require for me to put some "skin in the game" by paying for a percentage of the purchase price. I read up on every hard-money lender that I call prior to any deals. I make sure I know exactly who I'm "going into bed with", as they say. lol

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Honestly, there are many other strategies that can work, but these have worked for me in the past and have yet to fail me. 

As an exit strategy, I usually have a list of local investors from "We Buy Houses" bandit signs, etc. I call them up and see if they are willing to pay for a deal, either a "finder's fee" or a percentage from the profits. After building report with these investors, you may have access to hundreds of possible deals in your future. 

I hope this helps, good luck!

-Elvis