creative financing???

[Thom Sieloff]

Greetings my good friends at Bigger Pockets! My wife and I are looking to acquire our very first rental property. (WooHoo!) However, we need some ideas on how to get financed.
The scenario... We have no money to put down, we both have pretty good credit (upper 600s) & each have jobs, yet we are close to maxed out on our cc. I also recently started an LLC out of my home state of NV and am filed as a foreign entity in IL, which I want to purchase all our properties under, however because it is new, it has no credit history, which means we will have to cosign.
We want to use the good debt to eliminate the bad debt and build our rental portfolio and eventually retire.
Any ideas?

[Patrick G.]

Tom, I know it's not the answer you wanna hear, but I would do the following:
1) get on a super tight budget
2) Pay off all your consumer debt
3) save money
4) purchase an inter-city row home or rural mobile home.

That is not popular advice here, I'm certain I'm in the minority. I'm currently on step number 3 working on step number 4. I paid off over $50k of consumer debt in 4 years. It was very much worth it.

Right now it is really hard to get 100% financing. Almost impossible. Even if you scraped together 3% to put down on a house, It's going to be tough to get into a rental that cash flows. Multiply that by the fact that without paying off your consumer debt, you are not going to have the financial margin you need to handle the things that 'pop up'. Multiply that by the fact that if you don't put 20% down you will be paying PMI or MPI, which is the equivalent of flushing money down the toilet only to clog your septic system.