Two investors bought a house without their own money using an 85% hard-money loan from Matt Strong and $60,000 from a private investor found on social media, offering 10-12% annual returns. They recommend borrowing extra to cover closing costs and repairs so you have a cushion.
I'm sure you guys are wondering like, how did we do this without any of our own money, right? Yeah, I mean, that's the main question on everybody's mind, right? How do you make $86K with no money of your own invested?
First thing we did is we hit up our boy Matt Strong, the hard money lender that we use, and he funded I think 85% of the deal. Yeah. And then what I did is I went out on social media, I posted and said, hey everybody, I've already raised 85% to fund the deal that I'm buying. Who can bring 15% for the deal and I'll pay you a 10 to 12 12% return on your money. So I found someone that was willing to give us, I think it was $60,000 to fund the deal, and we paid them a return on their money. So we had the hard money lender brought 85%, we had the private money lender brought 15%, or whatever the numbers work out to be. We gave that private money lender, uh, 10% on their money.
Private money lender actually brought more than the 15% and we covered, which is a good idea because it helps cover closing costs. It helps cover, like, even though we didn't fix it up, we did pay to do some minor repairs to like meet inspections. So if you can, when you're borrowing private money, always borrow more than what you need. And if you can get repairs, get repairs too.
Why Traditional Wholesaling Keeps Failing You (Use This Pre-Flip Method Instead)
