New investors looking for a private lender, or advice in general

[Shannon Vinson]

My friend and I are trying to get our real estate careers started, and we're finding it pretty difficult to afford the 20%-25% down payments for the properties in our area. We're interested in fix and flips to start out, and then work our way into rentals. We know that cash is king when it comes to buying power, especially in the current market. 

We've already had two potentially profitable properties snatched up before we could even go look at them. So we know that conventional financing just isn't going to work. So to me, a private lender makes the most sense in my situation. We are in the southwest Florida area; Lehigh Acres, Fort Myers, Labelle, Cape Coral etc. If anyone is interested please let me know. I would also really appreciate any advice that anyone can share for alternative methods of purchasing real estate with low money down, in my specific area. Thanks!  

[Corey Chappell]

A hammer will go a long way to building a house but a hammer alone will not do the job. You need a lot of tools in your tool belt so to speak. The first thing I would advise is get as much knowledge as you can. After all it's a career and a profession so you want to be the best right? That requires years of study, practice and more study! The more tools in your tool belt the more opportunities you will have.

If you are dead set on fix and flip but have funding issues AND issues finding a good deal there's an easy fix:

Step 1:) spend half your time getting in with local investors that are also interested in fix and flip

Step 2:) spend the other half of your time getting in good with local wholesalers

Notice I didn't say spend any time looking at houses?

Let the wholesalers bring the deals to you. If you see one that looks really attractive you get with the local fix and flip partners to see what they think. If they also think it's a good deal the wholesaler is happy, you're happy and your fix and flip partner is happy.

If you find one local fix and flip expert that's willing to mentor you that's great. If you have several you can bounce projects off to see if they are really good deals that's even better. And these partners will have a lot more experience and connections when it comes to traditional/ hard money lenders. They will also be able to help you tell a good deal from a bad one and can help you learn how to estimate your repair costs, marketing costs, estimated time on market etc.

Your experience level will go a long way in determining how things go. If you keep presenting your fix and flip partners with "deals" for 5% below market that need 45% in repairs it probably won't last long. But then my question would be how experienced is the wholesaler you're using to source the deal?

Find 2-3 GOOD wholesalers in your area. 

Find 1-2 GOOD fix and flip partners who don't mind you learning a little, taking some of the risk and getting a bit of the action.

Yes it will be hard work, but then again so is getting a law degree and spending 20 years in front of a judge. That's what a career is. If you live in a moderate to large city finding a few good partners on both sides of the equation just takes a little time and effort.