Starting with Private/Hard Money

[Kyle Wilkins]

Hello, 

I have long been looking to begin investing in real estate. Ever since being inspired several years ago I have known it is the proper path from me. I have read books, frequently scrolled through BP, listen to the podcast, and have analyzed deals on the market with the BP calculator. While doing this I have began to get my financial house in order as well, and while I am happy with the progress made, I am ready to stop sitting on the sidelines and began my path to FI.

I, of course, understand that I will need to be in good standing for a traditional loan and of course to have my reserves ready for when something does go wrong, but I am interested in exploring hard money in order to help get that all coveted first deal. From what I have read, it seems like it will be difficult to get 100% financing, with 90% being the highest financed amount to expect. I was curious if anyone here has gone this route to begin their investing careers and which tips you can provide to someone looking to go down the same path.

I sincerely appreciate your feedback and look forward to rubbing shoulders very soon.

Kyle

[David Flores]

@Kyle Wilkins

Hi Kyle, I am not sure if you know what seller financing is but you can get deals fully financed through this. Essentially the seller would be carrying your down payment to the bank. You can avoid PMI this way too.

Keep in mind in a seller financing situation you would be carrying two loans. One mortgage from a bank and the other from the seller. This is not allowed though on traditional financing vehicles. You would have to work with a smaller local bank to do this. I highly recommend them anyway as bigger traditional lending is a pain to work with. I actually enjoy working with local banks and have created great relationships with them.