This is the final episode in my month long All-Star Q&A Series. All month, I have been asking some of the most incredible real estate investors that I have interviewed over the past seven months questions that I commonly get from new real estate investors. This is an incredibly powerful series and I am really excited to bring it to you. We are concluding the series with the following question: what is the best strategy for securing funding?
Like I’ve said before, Brandon is the senior editor at Bigger Pockets, which is an amazing community of real estate investors. He is also currently working on a book on creative strategies for investing in real estate with little or even no money down–I know it’s going to be awesome, so keep an eye out for it!
Getting back to our topic for this episode, Brandon calls my question the “almighty question” for getting started in real estate. He really thinks that the more methods for securing funding you understand, the more deals you can do, and he emphasizes how important it is to think creatively and to keep an open mind. Ask yourself “how can I afford this?” instead of thinking “I can’t afford this.”
Brandon says that, while there’s no such thing as “no money down,” there is such a thing as “none of your money down.”
If you do have a little bit of funding, Brandon suggests that you can use conventional financing and take a 20-25 percent down mortgage from your local bank or credit union. He recommends shopping around to find the best deal. You could also look for a portfolio lender, which is usually a smaller bank or credit union that will let you do things that bigger banks won’t and allow for more creative financing. Another alternative for long-term investment is to have a live-in investment, that is, a property that you live in and invest in. There are a few different investment programs that allow you to do that putting a very small percentage down. Another financing method is to form a partnership, which can be structured based on what each partner can bring to the table. Hard money lenders are another good option, especially for house flippers, but they do charge high interest rates and are only good for short-term investments. Finally, you can raise private money by offering someone an interest rate, or percentage of the profit. Again, this can be structured in many different ways, but make sure you know the rules and do your research first.
Brandon truly knows his stuff! I’m so glad I got him to be on this series, and I’m sure you can see why.
This concludes my All-Star Q & A Series. As an experienced investor, I got a lot out of the series, and I really hope you did too!
Find Brandon at: