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Updated over 7 years ago on . Most recent reply
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Great Deals, but I'm Broke! How to Attract Financial Investors?
So, I've been browsing the MLS for some weeks, now. I've viewed some decent deals and some great deals, but there's a common trend: I don't have enough money for these deals! I'm curious to hear how the BP community goes about finding and building relationships with individuals that can fund deals. I have a deal right now that I want to jump on, but without the cash, it's simply impossible. I would be more than thrilled to hear from the community about your strategies for finding lenders. THANKS!
Most Popular Reply
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$12K is plenty if you indeed find a good deal.
For example, let's say that houses sell for $130K and rent for $1300/mo in a particular area.
You find a fixer-upper in that area for $60K that needs another $30K of work and $5K for closing costs, etc. A hard money lender would loan you 70% of ARV or $91K. You need to come up with $4K out of pocket to do this deal.
Once you finished the rehab, refinance out of hard money loan into 30 yr fixed. If you manage to get 75% loan to value at refinance, you will receive $6K in loan proceeds after you've paid the hard money loan.
Oh, and don't forget to rent this house for $1300/mo. This should make you $400-500/mo in net cash flow.
Nick