All Forum Posts by: Priscilla C.

Priscilla - I think for your first deal you'll need to put in a chunk of cash yourself and perhaps combine with another private investor/lender. For example, if you buy with cash maybe you find 2-3 people to give you money for the renovations. Then, after you drive up the value you can refinance the property and get a 75% cash out refinance. With that cash from the refinance you pay your lenders back and retain what is left. I think if you do that once or twice you'll be in a better position to then secure a hard money loan from another lender and appropriate leverage OPM in a larger way. Good Luck!

 I agree with Andrew, if you have cash do your first project with your own money to prove proof of concept, many lenders will want to see you have experience and can manage and handle the project. Some will not finance to first time investors and those that do you will pay more in interest, so if you have cash use it for starting out since you should not scale and buy more than one property until you can prove to be successful.

It's generally fairly hard to convince someone to lend you a private loan if you have no experience investing. The only exception are parents, relatives and close friends (i.e. angel investors).

Best bet is to build some experience by house hacking (FHA loans allow for buying up to a fourplex, as long as you live there, with only 3.5% down). Then when you can show some success and a portfolio of experience, it's much easier to convince people to loan to you.

 For most getting started, the best way to get into the game is with atleast enough of your own money to put a down payment. That is usually the blocker that keeps people out.

If you ahve a down payment, you can get a bridge loan to rehab the property and assuming that goes well you can then get a DSCR loan for long term hold.

I would not try and raise money from people (alot of legal implications), but if you know people with money who want to invest, you may be able to get preferred terms

Also sometimes best to partner with someone with experience as well.

Your backyard isn't a bad idea. What are there like 4-5 new Amazon plants within 30 minutes of Plainfield? Plainfield is rising. You can do well there with rentals. You also have North Lawndale, Woodlawn and Southeast where many new data centers are going in. Depends on your preferred barrier of entry...

Otherwise, Arizona, Texas, North Carolina and Ohio all come to mind in regards to emerging markets. Other locations in Utah, Idaho, South Carolina and Montana have also shown much emergence.

Overall, using the proper zip code research, you can find pockets everywhere. So, you don't need to invest far away for everything. But, it just depends on your comfort level. 

Overall, finding the zip codes that are growing in population is recommended.

I'd say best way is through connections with other investors in the community! Members are always bringing deals. 

I'm a member of the Joliet Regional Landlord Association and we hold monthly meetings for real estate investors to network, and we also bring in guest speakers to come speak to members about various topics.

You can message me if you have any questions! ✅

On Cash purchases, most lending institutions will make you wait 3 - 6 months, sometimes more before you can refinance at new value. The ones with no seasoning periods will make you pay dearly either with the rate or with loan costs.

In the scenario you mentions above, if you bought a house for 30k (you didn't mention doing any work, but I assume since you mentioned BRRRR there is a rehab), you do the work and get a renter in there with a lease and then after the seasoning period, you now can refinance based off the new value of 165k of which you should get 75%.

But why 15 yr mortgage, why not 30 yr to make the payment smaller?  

A quick check for your max loan payment a lender will allow is to divide your rent/1.1 that number is around what the max loan payment will be by the lender.