Starting out with no money

[Tiffani Guy]

How realistic is it starting without buying homes in cash and obtaining a hard money loan? I’m researching and looking to start rehabbing homes, but want advice from someone who has started with using lenders vs straight cash.

[Nadia White]

Hi Tiffani, we have never (and probably will never) used our own money to rehab houses. Even if hard money lenders seem to be expensive, they are worth it because they help you to jump-start your business. 

However, here are some considerations:

1. Never (and I mean NEVER) mortgage your own house to start your business. You and your family need a roof over your head and the last thing you want to do is to put that in jeopardy.

2. Make sure that you analyze your deal with someone local who is willing to help you honestly. A good money lender though would be able to help you out with that! Your numbers must be rock solid so that you do not lose your shirt.

3. I would recommend that you have some money saved just in case you discover "skeletons" during your rehab. 

4. Start to network with high networth individuals who can become your private lenders later on. Now, careful there: learn, go to seminars, don't break SEC rules, read about private lending before you jumpin there. (a whole other conversation altogether...) . But in the long run, private lenders will be a cheaper way to fund your deals. 

5. Believe in yourself. YOU CAN DO IT. 

Good luck and success!