Other People Money (OPM)

[Kenneth Garrett]

When it comes to funding projects, I use Private Funding. It took a lot of networking and proving that I know what I am talking about. I went to a lot of education programs, meetups and REIA meetings.  I did not find my investors on line by googling Private Investors.  I find face to face works best.  This is a people business.

I now fund all my buy n hold projects and rehabs with private funding. I put in about 5% of the money so I have something invested in the project. The funds are protected by a note and mortgage (deed of trust) and at the end of the day, the investors are investing in me. I will protect there money as if it were my grand mothers.

I purchase, rehab, put a tenant in the property and refi the property (BRRRR). Its typically about a 120 day process. I use commercial loans for residential properties. My properties consist of SFH, 2 and 4 units and student housing. It keeps me from putting up 20-25% of my money. The refi is usually at 80% LTV because I make sure the Debt Service Coverage Ratio (DSCR) is around 1.70 - 2.0. Lower DSCR at least for me 1.35 or better I can get 75% LTV. Use small local regional banks for the best rates and ease of the process.

I hope this will encourage some people to be creative in your deals and to become successful in your real estate investing career

Good Luck.

[Andrew Postell]

@Franco Fanith FHA Loans are just for your primary residence. Same with any 3% or 3.5% down loans. What this post is about is financing investment properties. You certainly don't need 20% or 25% down using the BRRRR method. Usually we have to use a different type of "aquisition" loan to buy those properties and private money is a great source to do it. I hope this makes sense but feel free to ask anything additional. Thanks!