Starting out with no cash?? What would you do?

[Adam York]

Hi everyone!
I've about 6 months into my real estate journey and have been trying to soak in as much information as I can. However, one roadblock I can't seem to get past is how to fund my first deal. We have very little cash, which is barely enough for emergencies so dipping into our savings isn't an option. Here are some of the options I've considered...

- Conventional loan for property purchase and use a HELOC for the down payment (about 60k equity in current home). From running the numbers on this option, it seems like the property would have to be an insanely good deal to get it to positively cash flow after making mortgage and HELOC payments.

- Hard money lending for purchase and renovation. I have a hard time believing a HM lender would take a risk on a first time investor with no cash. 

- Sub-to/seller financing: This seems like the most realistic option, but is very intimidating and seems to require some sophisticated knowledge of real estate.

- Partnership/private money: This could be an option. I know some people who could potentially partner with us to provide the cash, but it would probably have to be multiple people and structuring the deal in a way that is profitable for all parties seems complicated and I'm a little lost on how to do that.

Which of these options would you choose in this situation? Any and all advice is greatly appreciated!

[Chris Seveney]

Quote from @Adam York:

Hi everyone!
I've about 6 months into my real estate journey and have been trying to soak in as much information as I can. However, one roadblock I can't seem to get past is how to fund my first deal. We have very little cash, which is barely enough for emergencies so dipping into our savings isn't an option. Here are some of the options I've considered...

- Conventional loan for property purchase and use a HELOC for the down payment (about 60k equity in current home). From running the numbers on this option, it seems like the property would have to be an insanely good deal to get it to positively cash flow after making mortgage and HELOC payments.

- Hard money lending for purchase and renovation. I have a hard time believing a HM lender would take a risk on a first time investor with no cash. 

- Sub-to/seller financing: This seems like the most realistic option, but is very intimidating and seems to require some sophisticated knowledge of real estate.

- Partnership/private money: This could be an option. I know some people who could potentially partner with us to provide the cash, but it would probably have to be multiple people and structuring the deal in a way that is profitable for all parties seems complicated and I'm a little lost on how to do that.

Which of these options would you choose in this situation? Any and all advice is greatly appreciated!

 you will probably not like this answer, but save money. Investing in real estate without any cash is a disaster waiting to happen. Now we will get all the people commenting about how they did it the past few years but making money in real estate was like shooting fish in a barrel. 

Over the next 3-5 years you will see liquidity become tighter and those who are over leveraged no longer bragging about how wonderful real estate is. With no money you have ZERO exit strategies except sell and if the property values decline and you need $ for repairs. You are doomed.