Ideas for raising money quickly for next rental property?

Question

My goal in life is to own as many rental properties as possible. I recently purchased my first duplex. I would like to make managing the properties my full time job. As everyone knows, purchasing and fixing real estate requires a good amount of money. I currently do not make very much money at my full time job ($30k pre tax). I need to save up enough cash for a down payment plus enough for any repairs that need done on my next property. I was thinking about learning to trade stocks to hopefully earn enough to get my next rental? I am trying to get this rental business going, but $30k a year is not nearly enough for me to achieve this quickly enough. I just can't accept the fact of slowly saving a little each month until I have enough, which would probably take YEARS. I am open to any ideas that could help me earn money more quickly. I am striving for greatness, but feel like I'm stuck treading water in mediocrity. I need help getting to the next level and beyond.

James Wise · Answer

You don't want to do any wholesaling. There are tons of legal rammificatioms and it is also a very poor way to earn income in the industry. Essentially it is like entering into a fight with one of your arms tied behind your back.

Instead get yourself licensed and do real estate sales part time. Use your commissions from this to save up for down payments. You will also be exposed to the good deals before the general population so you will be able to snatch up better deals than you otherwise would have and you'll earn a commission while doing it.

Account Closed · Answer

Listen to @James Wise. You need something that both generates income and helps you learn the business. Becoming a licensed agent accomplishes both of these. Also, I believe in OH you need to be a licensed RE agent to perform property management services on properties you don't own, This route has the added benefit of qualifying you for the career you are looking to pursue.

Wholesaling seems easy, but to his point, there are pretty clear laws you have to follow and if you don't, it's very easy to wind up in a bad spot.

RE: Need to make money faster. The only way I have found to do it is to grind and get really good at what you do quickly. There aren't any shortcuts. If you want to earn more, you have to improve yourself so you can add more value. Income is tied to value, not time on the job, not just showing up, not just working long hours. Do things others can't or won't, and you will make income others can't or won't.

Account Closed · Answer

Thank you all for the great advice!

Mike Banks · Answer

A lot of people use credit. Start building your credit and you will be able to get unsecured lines of credit like Terry Adams talked about in Bigger Pockets Podcast 134. If you haven't heard that episode yet, check it out. But, in order to get a line of credit you will need to provide financials, which isn't a problem for the seasoned investor but may be in your scenario.

However, if you don't have strong financials but you'd still like to leverage the bank, you can get business credit accounts at zero interest for 6-15 months WITHOUT FINANCIALS and all you need is good credit history/score. You can use these accounts as cash with a small fee (not a cash advance). I have helped thousands of RE investors clients get business credit for RE investing since it's a great option for people looking to get started in RE, it's also great supplement for the seasoned investor looking to do more deals. You do need good credit history, but if done properly, you can keep the business credit accounts off of your personal credit report which allows you to keep the debt off your personal report/score. There's also ways to get multiple lines set up which will allow you to balance transfer keeping it at 0% for as long as possible to keep your profits high. There's a lot more info on available on this subject. For example, if you would like to get approved for the largest line possible you must appeal each account limit. Message me for more info.

Barbara Phipps · Answer

Hi Nick,

You can look into EMD and gap funding. Let me know if you would like help with that.

Jay DeCima · Answer

Nick

I posted this to a newbie recently.  I think it applies to you. Food for thought especially when you don;t have a boatload of cash to begin.

Post:

Let me make a slight change in what you are looking at that can have a huge effect on your investing. Instead of a 4-plex, start thinking just a little differently.

My biggest success over the years came from buying GROUPS (5-8 houses) of older homes on a single parcel, in older, blue collar parts of town (not slums). Because banks will not finance these types of properties, 90% of the time I got seller financing (on over 250+ rental homes I had at my high point). The seller knew he/she would be taking back the financing. I did not have to talk them into it. My down payments usually were around 10%.

I suggest you read up on a few kinds of investing you are interested in and then pick the one you think would be the best for you, and one that will not require a boatload of cash to start. Then find the best mentor or expert you can in that kind of investing. Learn from that person and stay focused on their kind of investing. Find some of these mentors on a Google. See how many pages of results pop of for them.

I have many related blogs on my website.  Go to the website address in my BP signature below, then on top right side of page, see the search box, type in "PLAN".

I also just started a BP blog and will be posting many ideas for newbies

Good luck.

Fixer Jay DeCima

Michael Key · Answer

Any possibly of earning additional income or seeking new employment?  In your situation, I would be looking to increase my income. Lenders want to know you have the ability to repay your loan. The greater your income, the more confident they'll be. Stock trading doesn't generate confidence overnight. It's an indicator of risk.I would take others advice here about continuing your education here with BP and looking at solid ways to raise your income level. Be it another job or a new side hustle such as becoming a realtor.

Pratik P. · Answer

I wouldn't suggest you spend time on learning how to day trade.  Here's what I would do.

1. Read read read everything you can about RE. Especially about creative financing.

2. Volunteer some of your time to work for a local experienced investor and learn from them.

3. Get on loop net, zillow, etc and start analyzing deals.  Everything from SFR to apartment complexes.  This will help you understand your market and know what's a "good deal".

4. Start marketing and looking for these good deals.  If you can find a great deal,  I'm sure you can find a partner with the cash.

Good luck!

Craig Bowen · Answer

Hey Nick,

Agree with Jason and with Natalia.  The time you spend learning the market (something I'll bet pretty much everyone here has thought about at one time or another) can be spent driving for dollars, putting up bandit signs, stuffing envelopes...on and on... when you are starting out!  Find out who the movers and shakers are in your area and beat their doors down....and learn!

Do this with consistency, and I promise you, one day you will just step in it.  Happens all the time!  And stay active here.  Ask questions and meet some of your local BPers.  This is the smartest group of people I have ever met when it comes to RE investing!

Good luck sir and remember, the better prepared you are, the "luckier" you are!

Jason Dillard · Answer

Nick,

Wholesale to raise cash.  Make offers like you have money.   Make more offers than anyone else and the cash will come.

The only reason I would drive for Uber is to make money for my wholesaling advertising.

Ideas for raising money quickly for next rental property?

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