Skydiving, anyone?

[Jody Sims]

I would like to ask about funding a deal and the order in which it's been said you should approach it.

This is what I heard from one source: FIND, FUND, FIX, EXIT. Seems to me if you go find the property first, that's no different from saying "Let's jump out of this perfectly good airplane without a parachute. We can find one on the way down." If you don't know without a doubt you have someone willing to work with you to fund at least a portion of your deal, aren't you setting yourself up to lose the deal? Why scramble around after you've gotten a house under contract, trying to finance the purchase and rehab? Why wouldn't it be better to find a private money investor first?

[Bryan O.]

Hi @Jody Sims. You can't fund until you have a deal, but once you have a deal it's too late to find funds...

What you do is line up the funding: get a private investor or bank that agrees to a flavor of deal. i.e. If I came to you with a 3/2 for $80, ARV of $130k, $20k rehab, and I plan to do it XYZ in this timeline, would you fund that deal? Yes? Okay! I'll go find one!