Need a 100% finance hard money lender. Is that realistic?

[Cesar Esperat Jr]

Hello everyone. I am a beginner, wannabe real estate investor. I have lots of education but have yet to do my very first deal. Needless to say I am very much wet behind the ears and do not know what I am doing beyond reading REI books. I also do not have any capital of my own to invest nor do I know of anyone in my social circle who has the monies I need to do my first fix-and-flip. I was thinking of partnering with a hard money lender but since I have no capital of my own I don't have the resources to pay for the HML in the interim between acquiring a property and finally selling it at closing. Practically speaking, I will need a financier who will front the monies I need to do the fix-and-flip 100%. In exchange I will do all the grunt work and upon sale of the property repay the loan plus 10% interest plus majority of the profits from the sale. All I ask is to get at least $5k from the whole deal no questions asked. I am willing to do this so I can gain the practical experience, build some capital and establish my LLC. In other words, I just want to get started. However, I am hard pressed to believe that anyone would be willing to do it. But then again I don't know if that is in fact the case as I have yet to foray into the real world of REI. I do recognize this is a huge risk for the hard money lender. So, is what I am hoping to be able to do realistic at all? If not, how then can I get started? I have lots of student loans from graduate school and have no DTI ratio to leverage. Financially I have no "skin in the game" that I can bring to the table except my work ethic, intelligence and integrity of character. Any information or guidance you can give me will be greatly appreciated.

[Erik W.]

@Cesar Esperat Jr, it's the oldest dilemma in the book...how can I get money if I have no experience, but how can I get experience if I have no money?

Look at it from the HML's view: for him to be comfy you would have to find such a screaming hot deal as collateral that even if you took all the fix up money and flew off to Tahiti the next day they could fire-sale the property in a week "as is" for a tidy profit. So basically, you'd have to "buy" something for about 60% of Fair Market Value as is today, which is extraordinarily difficult to do, especially when you're new and have no systems in place, no advertising, no word of mouth, and no reputation.

So if you're going to have to find such an awesome deal anyway, why not just find a not quite so amazing deal for 75% off FMV (much easier!), lock it up and wholesale it to another investor and you take a $4000 - $5000 contact assignment fee? Same results as what you're wanting to do with your first flip, but it's easier to find those deals and you don't have to find someone to float you the funds.

P.S. If you want to be a real estate investor, you don't want to get experience doing grunt labor rehabs. You want experience finding under priced properties. That will impress a HML much more than if you can swing a hammer.