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Updated almost 4 years ago,

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7
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Adam Smugala
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7
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Newbie investor looking for financing tips

Adam Smugala
Posted

Hey BP community!
I'm a new-ish investor, looking to build wealth through investment properties.  I've been doing lots of "window shopping", figuring how to build the business, etc. and getting to a roadblock on financing (the elephant in the room).  Here is my current position:

-I have a full-time job, making $80k/yr (single income, wife and three kids)
-I bought my primary residence 1yr ago with 20% down (so minimal equity)
-I partnered with my parents and bought the neighboring property that was split off my property and it currently has a renter in it
    -this property cash-flows but not significantly due to the renter paying under market-value to the previous owner and she is a friend, takes care of our kids, etc, so we want to keep her there.  Acquiring the property was more to secure the property and not have neighbors.  My parents may buy it out long-term, freeing up my capital, but that is TBD
-I have no other debt other than my house and the rental
-780 credit score

With that said, getting financing for my first "real" investment property feels daunting. Since I bought my house and the adjacent property, there is very little equity to pull out of either property and buying both took most of my cash. Being single income and with my expenses, I can't save tons of cash and it would take years just to get a down payment. I'm looking for advice from this large pool of professionals on what my best option is get my first deal done. My investor pool is quite small, I've considered personal LOC for a down-payment on a conventional loan (not sure this is even feasible). Any input for a lowly first-timer is greatly appreciated.

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