Actually Youngstown area

[Marshall C. Call II]

Hi folks. Sorta new to investing and sorta new to BP. Does anyone have advice on financing? I am 2 conventional bank loans in and I don't mind doing it this way. The problem is the 25% down payment. Even on a $30k house, I need $7500 plus escrow and $10k-$20k for rehab. The bank is charging points as well just to get 8+% on the loan. Any thoughts on more creative financing other than taking money out of my personal house? I don't know any private lenders and hard money makes me nervous since I'm a buy and hold guy and the payback isn't as cut and dry as it is on a fix and flip. Appreciate any input and I'm glad to be part of the BP community!

[Dan M.]

Hey Marshall,

In my opinion that 8+ is way too high, I would speak to another bank or a DSCR lender. How is your credit score? You may want to start working on your credit score to save big long term dollars on better rates in the future. Noone has a crystal ball but rates supposedly are coming down in 2025 that should be enough time for you to do whatever you have to do if your credit is below 750.

Some ideas besides that:

Depending on how much equity you have you could do a cash out refinance to get money that way. 

Do you have a 401k you could take a loan from?

Save relentlessly. On everything. From groceries to your electric bill - on ANYTHING you can. Small sacrifices lead to long term gains. This includes the expenses on your current properties. Doing this for a few years with honest effort will put alot of extra money in your pocket. 

Could you rent your primary and move into a new multifamily to save expenses that way, then move out in a few years? Could you rent out part of your primary to generate extra income?