Funding a small deal

[Kyle Isenberg]

How are investors funding Brrrr deals when a property purchase price is under $50k and rehab plus purchase price is under $75k. I find that a lot of companies wont loan on a property with values that low. So if your in an area that has extremely low prices how can you get funding for the deal?

[Andrew Postell]

@Kyle Isenberg The first few properties I every worked the BRRRR on were $30,000 homes. And nobody wants to lend on properties that low. That's a car for some people! There's all sorts of lending challenges at these price points which is why a lot of investors stay away from them. Same with condos and mobile homes. Super hard to get financing. Here's some tips:

1. Work with smaller, local community based banks.  Their charter specifically states they help the community so they usually have friendlier terms for us.  Expect a 20 year adjustable rate mortgage - which will affect your cashflow - but it is possible to find these.

2. Visit your local REI groups. There are many groups that meet across the country. Some post here on the Bigger Pockets Marketplace. Many post on meetup.com. Even facebook will have some. Networking is always a great practice and you never know who you might meet there and what good information they have to share. Would certainly recommend visiting if one is close to you.

3. Get private financing?  I mean, this is pretty hard to do.  Especially if you are newer with no track record....but maybe it's possible.

4. Just start out on $100,000 value homes.  At $100k the whole world opens up lending wise - so maybe we should just pivot some.

Anyways, hope all of that makes sense.  Thanks for reading!