All Forum Posts by: David Malik

Quote from @Will Barnard:

If your desire is to fund your deal with zero money out of pocket, then you need to get creative with your financing and you absolutely will need a solid deal to make 100% financing possible. Hard money or conventional loan with a private money lender second (or money partner in equity position rather than debt financing). Seller financing is also an option including sub2. There are lots of ways to skin this cat, but keep in mind that overleveraging your investment adds an extreme amount of risk to you and your investment and it also hinders the cash flow as you have more debt to pay each month.

 I agree with a lot here but of course he would have to find a fit for the seller financing. Maybe the seller doesn't want to carry the paper. I'm curious, how much equity would that "money partner in equity position require?" I like both options but am actually looking for the second. BTW, I'm sure you would agree there are downsides in selling equity as well as over-leveraging.

Quote from @Goredy Tess:

@David Malik,

Thx for the response, based on your experience what would be your advice to purchase my first investment besides using my own money?

Thank you

There is the SBA in certain cases and of course HM lending and as a newbie your down payment, & rate will be higher than a seasoned fix 'n flipper or renter. I believe that it is a good idea to find a HM lender you can check out and trust because it gives you and extra option even if you have a bank that will back you. Coming from working cap it is pretty cool that an HM will basically lend to a start-up when my SBA lenders pretty much will not even if you have collateral and great credit. In addition, make sure you have a good contracting crew to work with in your area that is vital along with a CPA, RE agent, Attorney.

Good luck!

There are lenders that specialize in these type of properties. I remember an SBA lender in TX that does BUT saying that it is zoned for many other purposes has upsides AND a downsides. 

Quote from @Kate Jones:

To all real estate investors, what did you prepare before you made your first property purchase? Did you create a company name, business website, business card etc. What do you wish you would have been more prepared for regarding your business? Before you made your first purchase, did you have contractors, agents, and lenders in hand? 

 I tell everyone who approaches me about money it is vital to have a good relationship with a good contracting crew. Then for sure an accountant, a RE agent & Attorney. The first two in that order. Funny, that I don't include the very thing I am a part of which is HM brokering but the easiest way for things to be a nightmare, especially as newbie, is the first thing. Looking at a nightmare as we speak of that happening. Fortunately for me, I declined to get involved. What should have taken 3 months tops  of them finishing the house for rental is now 6 months and counting. 

Good luck!  

Hmmm, I'm a HM broker. I have yet to find someone who would do this. In fact, I am a working cap broker as well. I have been in that space longer than hard money. I guess it is possible to find someone who would lend you money on RE without collateral on the property U wish to secure but why would anyone do that without charging U a lot more for the capital? Of course, there is the option of using your retirement money for a down payment but if you should get hit by a meteor and perish, & I don't have anything but the paper the loan was written on I sure as heck would charge U a lot for the capital regardless of your credit score.