Trouble funding my first deal

[Michael Lonsdale]

Dear BP Community :),

LONG Time reader, First time posting! I've read, listened to, watched, and soaked up as much info as I can from this site over the last few years. Incredibly grateful for the people responsible for this site. 

I'm having trouble funding my first deal. (Well, not really my first deal, I've owned one rental before)

Background- I own a primary residence that is worth just over 500K. I have about 120K in equity in the house. I have a 720 credit score. My W2 pays me over 120K a year. My rate is in the low 3s. My job is new so I hardly have any money saved up. 

Problem- I want to start BRRRing but I don't have that initial 10% down to obtain a hard money loan. Obviously, I need that bit of seed money to start.  

Where I'm at- The last few months I've been working to obtain a HELOC on my primary residence as the seed money. Then I'll work to get a hard money loans, so I can start BRRRing. But I can't get a HELOC to close. I'm told my equity is just not enough yet or that I need to show two years at this job. I've gotten tripped up during final underwriting 3 times now.

What should I do to get my initial money so I can start BRRRing and be able to put 10% down?

A. Continue to pursue a HELOC. (If so, recommend someone for me to talk to)

B. Obtain a personal loan and use that money to get a hard money loan and start the BRRR process. (Recently leaning towards this, any suggestions on where to look?)

C. Sell my house and use that money to start investing. (I've owned the house for 13 months) 

D. I was considering a cash-out refi but my rate would almost double. So I'm not sure that makes sense. 

E. Something else, please let me know what I am missing! 

How can I get this initial seed money to then get hard money loans? 

Please let me know what my next move should be. Thanks in advance to anyone who provides suggestions. 

Respectfully, 

Mike

[Leo R.]

@Michael Lonsdale I'd say go with option F: forget BRRR'ing for now (it's pretty risky given the current market, and even experienced pros are failing to hit their ARVs), and instead buy a new primary that you'll house hack (if you want, you can do a live-in BRRR). You'll get much better financing terms, it will greatly increase the number of properties available to you that pencil out, and it's lower risk than BRRR'ing (esp. BRRR'ing on hard money). Plus, when done correctly, a house hack will lower your expenses while increasing your income in a single step--the fundamental key to building wealth.

Good luck out there!