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Updated about 8 years ago on . Most recent reply
Starting my investment portfolio w/ no money in the Quad Cities
Hello BP Community!
I'm writing today to get some advice on how to start my portfolio with no money down. I live in the Quad Cities (Iowa side). I will be closing on my first real estate purchase in about a week. I plan to live in this single family home for the time being. I got a great deal on a great property, and expect to make a lot of money in the future with it. This is my first and only mortgage, I barely have any debt, and a pretty good credit score. I know Fannie Mae/ Freddie Mac will issue up to 4 loans at a time for newbies, but with no money down they are virtually impossible to get a hold of for investors. I'm not totally opposed to a hard money loan, but I would definitely like to start with something that's lower risk and less expensive if possible. Ideally, my first investment property will be a larger single family home within vicinity of one of the Colleges, Hospitals, Downtown areas, etc. Any and all input is greatly appreciated!
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Hi Alex,
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.