Takoma Park, MD · Member since 2011 · 22 posts · 4 votes
Hi my is steven price i'm pretty much a rookie real estate investor i am still looking for my first but i have 3 prospective properties lined up and lucky me there all within yards of each other. Now i did join a reality invest group and had my mom join as well but my whole problem is finding funding to purchase the property and flip it i've called banks they said i need equity and a stronger credit score also i called hard money companies but there interest on loans LTV are too high any ideas on how to get my first deal off the ground
Real Estate Investor · Bellingham, WA · Member since 2008 · 407 posts · 90 votes
14y
You can finish school and do deals at the same time. You could bird dog the deals to a wholesaler and receive a 3-5% finder fee depending on the quality of the deal.
Funding is always going to be a problem when starting. Once you have cash flow, then you can do more frequent deals.
Investor · Farmington, UT · Member since 2011 · 314 posts · 179 votes
14y
Steven, I did my first deal when I was 23, in school, and working. If you truly have the desire it will happen. Looking back on that first deal now I would do it different, but I got it done and learned a lot in the process.
Educated yourself on how to find the deal and then get out there and start looking, talk to sellers, advertise, etc. I understand that finding the money for a deal is a big deal to most people starting out, but don't get hung up on it. I promise you if the deal is a deal you will either find the money from an investor or you will be able to get it under contract and sell it.
This business works. how bad do you want it? Are you willing to sacrifice and do what it takes?
Residential Landlord · Indianapolis, IN · Member since 2010 · 592 posts · 138 votes
14y
I'm still in school and have started investing. If you don't have cash to pay for your deals or income to qualify for a traditional mortgage, you just have to find a different way to finance the deal. You can look into subject to deals, owner financing, lease options, joint venture partners, etc. Good Luck!
Investor · Williamsport, PA · Member since 2010 · 23 posts · 5 votes
14y
I would start with family and friends first. Then reach out to investors in your realty groups.
I just recently acquired my first property, a six unit in Williamsport, PA. I did it through creative financing. I have lots of school debt and less than desirable credit.
I guess I should mention how I structured it so you might have an idea on how to approach an investor or family.
I had shown this half remodeled 6-unit about 5 different times (i'm a realtor) and everyone thought it was to much work. It was listed at the time for 72,000. After while I found it on craigslist for 55,000! So I went and took another look at it. I knew this would be the perfect first deal. Bought as it stood with 3 of units rented it would be at a 23% CAP rate...but then if fixed up it with 6 units rented it would still have a 23% cap rate. I don't care who you are, a 23% CAP rate is a nice way to start out.
I tried the seller financing route but they weren't going for it. So I started talking to family and friends....and friends of family. I actually just told everyone I knew that asked me to find them real estate deals that I might have a deal for them where they could get 14% on their money as well as a 1/3 of the business. I just got lucky and one of them latched on to the idea and we ran with it.
We actually got a 105k loan to buy and remodel with. My partners supplied the downpayment (21,000) to the company at 14% amortized over 30 years with a call in 3 years(balloon payment). They also got a 1/3 stake in the company.
We are currently about half way through the remodel with 3 units rented, 2 pre-rented. and another that I feel will pre-rent soon as well. This is mostly thanks to the Marcellus Shale in our area. It has driven up the rents and have made affordable apartments a hot commodity here in Williamsport.
Once finished we will have a 6-unit apartment building for a whopping $105,000 that brings in $39,600 per year but with the vacancy rate I figure we are looking at 37,000. We pay water, sewer, and trash only.
The deals are out there. Sounds like you've found them but you just need to find the person or persons that can help you acquire it. Don't be afraid to give them a large percentage of the deal. you have to remember that you aren't putting any money of your own into the deal so even if you had to give them 70% of the deal to make it happen it would still be worth it. I'm not a fan of giving out big percentages but really the first deal is everything. Once you have that you have overcome the biggest hurdle. The next deal you can negotiate better rates if need be.
Flipper/Rehabber · Lake Isabella, CA · Member since 2011 · 969 posts · 488 votes
14y
I bought my first property at 22 while still in school. It was a good deal on a 4 bedroom house. We talked the seller into owner financing and my girlfriend and I borrowed the down-payment from family.
We rented 3 rooms in the house which covered all of the expenses and left a bit extra for fix up and improvements.
I learned a ton about rental management and when we moved on we sold it for a nice profit and it gave us the seed money for new projects.
Real Estate Investor · Pelham, NY · Member since 2011 · 3 posts · 1 vote
14y
If you're still in school, you may want to think about WHOLESALING the deal. When you wholesale, you lock up the property with a contract and look to ASSIGN it to a rehabber. The advantage is that you only need anywhere from $10-$100 as a binder. Then you assign the contract to another buyer who brings the cash to the closing. You get paid a fee at the closing.
This is a great way to get started because you don't have to worry about financing, getting contractors, project management, or selling the property while you focus on school. And you will get a few thousand dollars for finding the deal and getting a contract on it. A good rule of thumb for what price you should pay is ARV * .65 - Repair Costs - Your Profit
where ARV is the After Repair Value.
This strategy requires you focus on only 3 aspects:
1. Finding Deals
2. Locking Up the deals
3. Building your buyers list
Developer · Houston, TX · Member since 2008 · 488 posts · 121 votes
14y
You should check out any internships with developers in your area. I did an internship my senior year of college and rehabbed 2 apartment complexes, totalling 90 units in 3 months.. More expierence than I could ever get in a classroom, or reading books.
I found the internship on Craigslist. It was 50-60 hour a week job that only paid $250 per week, but it was not about the money for me..
SFR Investor · Kansas City, Honolulu, HI · Member since 2011 · 14 posts · 2 votes
14y
Doing deals is 'school' and in my opinion more valuable than any university you would attend. Finishing school is very important though as most of our society is brainwashed into thinking IQ actually counts for something.
If you truly want to learn a lot, go to as many free seminars you can in your area and also read as much as you can on the forums. :)
I also highly suggest doing the CCIM courses (see if you can get some college credit for them) as they are great.
