How To Get A Loan Directly Out Of College (No Work History Necessary!)

Every aspiring real estate investor comes across some road block that makes them feel like it is impossible to move forward. It could be not enough knowledge. It could be not enough time. Maybe it even has to do with your confidence.

For me, that missing piece was the financing aspect of the deal. I would like to think of myself as a relatively frugal individual, disciplined in my savings and willing to work hard for my goals. However, I am currently still a college student with no full-time job. This minor road block felt like a thousand ton weight had just been dropped on my shoulders. I knew that if I waited until 2 years after I graduated (traditional lenders typically require 2 years of work experience at the same job before offering a loan) to make my first investment, I would definitely lose drive and focus in my efforts to reach my goals.

There had to be a way!

I quickly decided that I wasn't going to let this (what I now realize) lack of knowledge hold me back from achieving my dreams. It wasn't long before I began hopping on calls with every real estate professional that I knew and found several ways to surge past my "problem". 

While these are by no means the ONLY ways to get your deals financed as a new or recent college graduate, here is a list of 4 ways to get into the game:

FHA Loan (With Some Incredible Loopholes):
So everyone knows about the FHA loan. It is a powerful tool designed to aid new home owners with a low down payment (as low as 3.5% down) and favorable rates. However, a piece of the lending criteria requires anybody applying to have the typical 2 years of work history at the same job... or does it. A great loophole to bi-pass this requirement is to get a job related to your college studies. Thats right! If you get a job in the same field as your college major, and the degree helped you to obtain that job, lenders can count your college years as "work experience" even though you were not getting paid. This loophole is probably my favorite on the list because it allows you to house hack and learn the game in a slower, more hands-on fashion.

Find a Partner:
This "trick" in the real estate world is severely overlooked by thousands and thousands of investors because they feel that only having a single piece of the pie is not worth it for them. However, almost every highly successful real estate investor has done so with... wait for it... partners! Partners can provide money, experience, etc. in a deal and I personally know several people who have taken advantage of the structure's immense power. Whether it's a single family flip, a small multifamily BRRRR, or even a massive apartment syndication, partners allow people to fill in the weak spots in their business and lead to benefits for all parties. Be sure to check out episode 73 on the BiggerPockets Real Estate Rookie podcast to hear all about partnerships when getting started.

Try Out Non-Traditional Lenders:
This trick may take hours on end, but can be worth it in the long run! Take some time to call up as many non-traditional lenders as possible and ask them if they can work with you and your situation. Thousands of hard money lenders, private money lenders, local credit unions, etc. exist around the country and can help almost any investor with their individual situation (often times for a higher interest rate than banks, but hey, money is money). For example, a lender that I have personally looked into is Dominion Financial. They are a nationally recognized private and hard money lender that bases lending requirements much more heavily on the quality of the deal and one's cash reserves than their financial situation. Local credit unions are also great options to reach out to, especially if you already have an existing relationship with them. Moral of the story: hop on the phone and chat with as many lenders as you can because you never know who just might be willing to work with you.

Suggest Seller Financing:
In my opinion, this is yet another underutilized financing hack. Seller financing is essentially when you form an agreement with the seller to pay them monthly for their property (plus interest), rather than a lender. This tool is incredible because it allows for virtually unlimited flexibility. Whatever you can negotiate can be made true. Want 0% down? Ask for it! Have bad credit? Doesn't matter (unless the seller cares, then you might want to also bring in a partner)! The key to seller financing is to find the pain points in a seller's situation. Try to put yourself in their shoes and develop a win-win situation for both parties. This way, you will be able to secure a great deal, and maybe even work with them again on more properties! One caveat to this method is that it doesn't work for all properties. Often times, banks will not allow this method while the seller is still paying down their mortgage. However, if a seller owns the property free and clear, you are golden! Sometimes, you can even bring seller financing into a smaller aspect of the deal, such as using it for the down payment on a loan from a non-traditional lender. This way, you put 0% down and leverage multiple strategies to make your deal come alive.

In the end of the day, the best part about real estate is that anyone can do it and anything can happen. All it takes is some drive to do whatever it takes. I really hope that this list can benefit you by giving you insights on various methods of financing. As a college student myself, I get it. I understand the struggles of getting started and wanted to provide what I can to benefit others in my situation.

If you have any questions, or if you want to discuss some methods not included in this post, feel free to message me. And as always, happy investing!

*DISCLAIMER* - Be sure to consult your desired lender before following this advice. Not all lenders are the same and different ones will follow different rules/criteria. Do not simply follow this advice without doing your own due diligence.