Getting close to my first rental property

[Austin Nelson]

How do I go about getting a mortgage or a loan for a rental property that I would not be living in. I would be renting the full unit out.

[Tom Cafarella]

Austin,

There are a few options for this:

1.  Go to a commercial lender.  Commercial lenders will do these deals all day long at good rates if you are able to put down 20-30%

2.  Go to a hard money lender: This will be much more expensive but you will get an approval much easier than a commercial lender and will likely be able to put less money down

3.  Find private investors to fund the deal(this is what I do)  

Doing deals with none of your own money is not the easiest thing in the world but 100% doable. I have been a real estate investor and have done over 500 deals in the last 5 years without any of my owner money.

You are going to need to get really good at raising private capital. There is an enormous opportunity right now to raise money from private investors who are sick of getting paid nothing for keeping their money in the bank and are also not that interested in putting their money in the stock market.

In general, you need to offer a rate of return that is high enough to get them excited, which means anywhere from 8-15%. If you are buying your properties correctly, you should have no problem paying this rate.

The best place to start for this is to go out to your centers of influence and let them know about the investment opportunities that you have. You will need to put together a nice presentation that explains the benefits to them, but if you meet with enough people, you will be able to find investors.

As you grow, and do more deals these investors will eventually seek you out and you will be able to fund any deal that you have.