@Alessa LeSar I am just going to be blunt. I think it is great that you have sold 20 houses last year but really, with that many houses that you sold, you should have more than 20k saved up right now unless you are living on that income. And if so, then I can understand. Also, the information that you have learned as a realtor is great for being a realtor, but not necessarily great for being an investor. In order to be a good investor, you have to think like an investor, not a realtor. Also, you need to have whoever will be you end buyer or tenant in mind from the very start of the purchasing process.
Twenty thousand dollars is a good start but also not a lot to get started with. It is possible to do it without any of your own money, but not unless you have experience. Without experience and without much cash it is more difficult. However, difficult is my middle name, or so my wife tells me (just kidding).
First you need access to more capital. You can do this through the HELOC that you mentioned. But you make not be able to take out much even if you have 80k in equity. A lot of banks only want to give you a HELOC up to 80% of the value of the home. So if your home is 300k and you own 220k, the bank would probably only be willing to give you a loan up to 240k, which would only be another 20k. With that being said, even at an interest rate of 8% or 9%, it is still 20k more than you had before, so I would say to go get the HELOC.
Next, start talking with banks and other lenders that work with real estate investors. Find these banks through connections that you have made by going to meetups in your area and asking people who they use for long term financing. This is very important because you will need to have an exit strategy when you get an investment property to either sell it as a flip or to refinance it as a rental. So you will need to work with some lenders that will do the refinance with you. And there are specific strategies to use when buying the property so that when you refinance it, you don't have to leave a lot of money into the deal. These strategies include buying the property well under market value and then forcing equity through rehabbing. Be careful not to over rehab the property. Most new investors lose money because they put too much into the rehab or they don't buy it at enough of a discount or they overestimate what they can sell it for. You should get onto a lot of wholesaler lists and analyzing deals so that you can start recognizing what a good deal in your area looks like. Don't buy the first property that looks good. Take a month or so of analyzing deals consistently in order to make sure you are really recognizing good deals. If you only have a little money to begin with then your margin of error is smaller than if you had more money to start out with. So you can only afford to get really good deals. Also don't get a deal that needs too much work at the beginning. That could be too risky for your first deal.
Next, search the internet for 0% interest credit cards. Apply for a couple in your name and a couple in the name of your spouse. Include estimated household income on both applications but don't include both names on both applications. The reason being is because the debt will count against both of you if the cards are in each of your names. These credit cards can help out with the repairs. Make sure you make the monthly payments on time and use the cards in the person's name that won't be getting the loan or the opposite person's name that will be getting the loan. This is because maxing out credit cards will bring the credit score down and it could affect you getting the loan at the end.
Truthfully, there are a lot of nuances about getting the refinance that is too long to write about here but take time to learn about it because it is very important. It's probably one of the most important steps in the process. What you don't want to have happen is you buy a property for 120k where a hard money lender gives you 100k and you bring in your 20k to buy the property and then you use the credit cards or the HELOC to put 30k into fixing up the property and now it is worth 200k and the bank is only willing to refinance 80% of what you bought it for, plus rehabbed it for, which would only be about 120k, because then you would need to leave in 30k plus the 2 sets of closing costs so you now have 40k left in the deal. So even though you created 40-50k en equity, now you have a balance on the credit cards still and you have your HELOC maxed out too. That is no muy bueno. That is malo (bad). So instead of buying the property at 120k, you will want to buy the property at 170k with a 50k rehab credit (this is an advanced strategy that works wonderfully but that most people don't do or know how to do). The rehab credit is shown on both sides of the settlement statement so they cancel each other out but it increases the purchase price to 170k. Then when you put 30k into repairs the total purchase price plus repairs is 200k which is where the appraisal comes in. Then, when you get the loan, you are able to get the loan for 75% or 80% of the 200k so you now get a loan for 150k or 160k, and you only leave maybe 10k into the deal.
This way you have a property where you have taken your 20k, you used some HELOC money and credit card money that both got paid off when you refinanced the property and you still have about 10k of your original 20k that you started out with and now you have a cash flowing rental that also has about 40k in equity.
That's how you do it.
Good luck.
