Bird Dog First? Or keep trying to find 100% funding (does it even exist)?

Question

Howdy!  I'm  a new investor in Weatherford, TX.  I want to concentrate on rehabbing and flip.

As my credit score is 580, and my wife is back in school (no savings, etc)...I'm having trouble finding 100% funding for that 1st deal.  I've found several houses which I think would work well for fix and flip, but they slipped away before I could find the funding.

I keep hearing about building a small cash reserve by bird-dogging for others, but if there's 100% hard money to come by in DFW area, and the numbers work for a high interest rate, back end points, etc...I would prefer to "jump right in".  I have an experienced mentor I'll be working with who owns rental property, has done rehabs in the past, and also owns his own HVAC business and knows every contractor in town.  I have the tools and support system to make this business work.  I just need to the funding for that 1st deal (and maybe the 2nd, since the 1st one will be unGodly expensive financing most likely :D )

Sorry to be so wordy...any and all suggestions appreciated.

~Shane

James Vermillion · Answer

I do not see why you cannot do both.  Try your hand a bird dogging while working to increase your credit score, work with your mentor, and form relationships with banks.  Find out what they would need to start lending (what credit score, how much down, etc).  By forming a plan to improve your current situation, working with your mentor, and bird dogging, you should be able to gain some experience and get ready to work your own deals.  You would be surprised at how quickly you can turn things around.

Ibrahim Hughes · Answer

Partner with your mentor to the point where he is on paper and taking legal responsibility (possibly even puttinmg money up). This will enable the lender to have more confidence in you. With no experience, no real skin in the game and no one signing the docs whose experienced and taking responsibility I don't see anyone being confident enough to lend you 100%.

And on your 1st deal, maybe first 2 deals, forget about making a huge profit, if any at all. You want the experience and the ability to say that you have a track record so that your deals afterwards will be easier to fund.

Shane Woods · Answer

@ Jason S: I can't PM you until we're colleagues.

:)

Thanks

Shane Woods · Answer

Thank everyone for your replies, they're very helpful.  My work has been crazy busy this last couple of weeks.  All I've had time to do is drive around and look for some "vacant" properties, take notes on them and look up owners, and read my email from here, on my phone when it comes.  When things slow down around Thanksgiving, I will devote MUCH more time to this business.  Hopefully by that time I'll have a property under contract, and will rehab it before work gets busy again in Feb.

@ Joel and Stephen,  perhaps I misstated my mentor's current real estate position.  Currently, he owns and operates his own HVAC business, and is "retired" from whatever he did before.  His real esate ventures right now consist of 3 rental houses, all of which have been updated recently (so I wont' be able to benifit from his knowledge there for awhile), and an upcoming project where he's looking to build several small rent houses on a piece of land he owns.  He doesn't and never has flipped for a living, just done a few deals here that there that fell in his lap.  But his regional contractor network is fantastic, so I'm all about that :)

@Chris Colvard, I have no problem with wholesaling, I just haven't researched it enough to feel comfortable saying, right now, I could do that and make money.  I need to learn more first.

@Ronald, I do plan to acquire a real estate license in the next few years.  Would like to start investing before that though.

@Jason S, I'll be contacting you.  Hope it's legit :)

Jason S. · Answer

I do not get the advice here.

He has the network.  The only thing he did not mention was if he had an expert, maybe himself, in valuation.  There is 100% Hard Money, no pymts required, available in TX. He said he know it would be expensive, which it is.

But why wholesale at that point?

Chris Colvard · Answer

Why don't you wholesale?

Ronald Cagape · Answer

I've always believed in raising capital through sales. I don't know the rules for selling property in the US though. I understand you need to be licensed to be an agent or broker and that's a whole different business model.

I agree with what James said. Work with your mentor and do bird-dogging first.

Chris Carter · Answer

100% funding died with real estate boom. If you didn't or couldn't prove you had what it takes when the money was plentiful why would someone fund a project with a new investor when money is extra tight to come by now...so ur best bet is either wholesale, birddog or save for rehab loan....

Adrian G. · Answer

I usually dont say this, but I think maybe you should take things slowly, build relationships as you go and learn as much as you can. Im seeing a lot of beginners "jump right in" lately and there getting burned....BAD. When I first started I jumped right in and the ONLY thing that saved me was the market, but I can assure you if I started now the way I did a while back I probably would have gotten burned. Theres no rush :)

Stephen Moore · Answer

If I were you id stick with that mentor you can learn the ibs and outs from him,plys the contractors which willbve vital to you,as well as imle sure he will be able to led u to lendets

Bird Dog First? Or keep trying to find 100% funding (does it even exist)?

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