Making Payments On Loans Before You're Making Any Money?!!!

[Amanda Scully]

Hello Everyone! 

I'll try and be quick and to the point: I am ready to start looking for my first deal. I have literally no money of my own so I have obtained a capital loan through a combo of business and personal credit (to cover down payment, closing costs, and potential rehab), as well as plan to use a HML for the purchase price (I will most likely get 100% financing for the rehab as well, so won't have to use the credit for that, but rather just the down payment and closing costs). Just curious of a few things:

1. Has anyone else done this as well and what was your experience?

2. What kind of deal did you do first? Fix and flip or buy and hold rental? (Or do you recommend one over the other?)

3. How do you manage to make payments on the capital loan (credit), as well as the hard money loan, while still in the rehab process and before you've (hopefully!) made your money?

I don't know if I'm overcomplicating things, but here is what I really don't understand...if I purchase a property and rehab it to either BRRRR or flip, and I have no money in the bank, how am I making payments to my HML as well as on the balance of line of credit I used to gain the capital to get started, while the job is still in progress and I haven't made any money yet (through flip profit, refinance, cash flow, etc.)? Am I missing something here? I imagine that as soon as you take out the loans (both HML and line of credit), you have to start making payments in the next month - these are part of the holding costs, right? But where is the money coming from? I'm so confused. Thanks in advance!