Your Favorite Financing Strategies

[Brian Wolf]

Hello BP Gang! Question for you all. I am still a newbie investor with only one deal under my belt thus far. I am looking to break the mindset hurdle of "My savings account dictates what/how often I buy." I know that if I want to scale I have to learn the skillset of acquiring properties without using my own cash or by recycling my own cash. The ideas and drive is there to find the deals...im ready to start letter writing campaigns, sign campaigns and searching hard to "buy right" with the ultimate goal of performing BRRRs. Here's my hurdle...and I know this is probably a silly one...but I wouldn't know what to do once I found a deal. I understand every situation can be different and require different or creative financing approaches. I want to have an arsenal going into it thought. 

So, I'm looking for some of your favorites or options you know you have going into a campaign knowing you wont be able to buy with your own cash. I do have the luxury of having some family and friends with cash willing to invest with me but I want to be rock solid on my education and approach before taking on something like that with good acquaintances especially family. If I did utilize these people to invest what's your recommended approach to structuring something like that. I bring the deal they bring down payment and rehab, perform a cash out refi then split equity and cash flow? Is it better for them to just get interest on their money and I keep the property solely? How would you structure it if they also wanted equity? 

Lastly, what are good book recommendations on this topic? I already ordered the BP Low or No money down book. Anything else you guys suggest? Thank you!

[Derek Dombeck]

Brian,

Try not to get stuck in analysis paralysis.  Get your marketing going now and start interacting with sellers. Good deals are made not found. They are made by solving people's problems. As far as money and structures goes,  look at strategies using Options, Master leases,and Subject to purchases which can all be used will little cash if done properly.  

Example........ I took control of a 3 bed ranch house last week. The seller wanted 150K and the ARV is 225K. My cash offer of 124K was not acceptable to him, so I said, if you will give me an Option to purchase for 6 months at 150K and I can do any improvements I choose at my expense, I will get it sold and my profit will be the spread. He agreed. Last night, exactly 1 week later, I accepted an offer for 200K. We did some maintenance I terms and painted the basement walls and floors and professionally cleaned the house. I have less than 2K in the deal at this point and should clear at least 35K after commissions and closing costs 30 days from now without ever owning the house.

My favorite education source that I send people to learn these strategies is cashflowdepot.com

Hope this helps!