Overview of Real Estate Rookie Podcast — "No Money? Creative Ways to Fund Your Next Rental Property (Rookie Reply)"
This episode answers three BiggerPockets forum questions from rookie investors about (1) acquiring properties with little or no cash, (2) finding reliable wholesalers, and (3) whether to line up financing before or after submitting offers. Hosts Ashley Kerr and Tony J. Robinson share practical tactics, real-world deal structures, relationship-building advice, and risk-management tips aimed at helping beginners get their first deals done using other people’s money.
Key takeaways
- Leverage other people’s money is possible, but having a small track record and financial cushions/reserves makes it far easier.
- Don’t limit yourself to a single funding strategy—prepare multiple financing approaches (bank, seller finance, private money, hard money) and submit multiple offers if appropriate.
- Wholesalers prioritize certainty—get into their inner circle by building relationships and showing you can close.
- Get pre-approval or know your purchasing power before spending lots of time on deals; proof of financing often matters to sellers and wholesalers.
- Be willing to accept smaller returns or give up equity on early deals to build experience and credibility.
Strategies for acquiring properties with little to no cash
- Bank financing: Some local banks still offer low or no-money-down products; useful for deals with rehab margin.
- Private money / investors: Raise capital from private investors; common for acquisition and rehab funding.
- Seller financing: Negotiate seller-carry terms to reduce cash needed at closing and tailor favorable terms.
- Hard money: Useful for short-term flips or when speed is required, often combined with private money.
- Creative deals: Assignments, subject-to, lease options, JV partnerships—can work but require careful structuring and experience.
- Tactical approach: Focus first on transactional deals (flips) to deploy investor capital, return cash, and build your track record.
Deal structuring, roles, splits, and protections
- Example structure: 50/50 equity split with investor receiving principal payback plus interest (e.g., 5.5% amortized) — attractive to risk-averse money partners.
- Sweat equity: Expect to give up a larger share early on if you provide the sourcing/management work and have no capital.
- Protections: Build reserves for overruns and vacancy; be transparent with partners about risks and exit timelines.
- Evolving terms: After initial deals and demonstrated competence, negotiate better splits and terms for subsequent deals.
Finding and vetting wholesalers
- Where to find them:
- In-person meetups and local REI groups (wholesalers often attend and collect buyer lists).
- Respond to “we buy houses” or cash-offer texts/calls and ask to join their buyers list.
- Google search: “sell my house fast [city]” to locate active wholesalers.
- How to get on the inner circle:
- Demonstrate certainty: be ready to close, show proof of funds or pre-approval, and communicate quickly.
- Build relationships: reach out regularly, tell wholesalers what you’re doing and what deals you can close.
- Take smaller-margin deals early to prove reliability and earn prioritized access.
- Why most rookies miss good wholesale deals: wholesalers first call their closest, proven buyers before blasting their list.
Timing financing — before or after offers?
- Preferably before: Know your purchasing power (pre-approval, cash on hand, private lenders lined up) so you don’t waste time on deals you can’t close.
- Have multiple options: bank pre-approval, private money, hard money, seller financing — different offers may require different funding.
- Exceptions: Truly “too good to pass up” off-market deals sometimes require lining up financing after signing; this is riskier.
- Risk consideration: non-refundable EMDs and wholesalers requiring quick close demand financing certainty; don’t overcommit without proof of funds/financing.
Common pitfalls and how to avoid them
- Pitfall: Expecting others to fund you without any track record — remedy: aim for a first small/transactional deal to build credibility.
- Pitfall: No reserves — always keep contingency funds for cost overruns or vacancy months.
- Pitfall: Overcomplicating the first deal — prioritize learning and relationship building over maximizing immediate returns.
- Pitfall: Relying on a single funding strategy — maintain options to increase the number of offers and negotiation leverage.
Actionable checklist (quick start)
- Get pre-qualified: know your loan limits and proof-of-funds options.
- Build a buy box: define markets, property types, and minimum returns so wholesalers know what you want.
- Join meetups and buyer lists: attend local REI meetups; respond to “we buy houses” leads and ask to be added to buyers lists.
- Reach out to wholesalers proactively: call/text, share buying criteria, and update them when you have deployable capital.
- Prepare a simple partnership pitch: outline split, payback terms, responsibilities, and risk protections for potential private investors.
- Be willing to take a smaller-margin first deal to build trust and experience.
- Keep 3–6 months of reserves per deal where possible.
Recommended first moves for rookies
- Aim for a short-term transactional deal (flip or BRRRR rehab-resell) to demonstrate competence and quickly return investor capital.
- Find a money partner who wants passive returns; consider paying back principal + interest while offering equity or cash-flow split.
- Use multiple financing routes when submitting offers (bank + seller financing + private money) to increase probability of acceptance.
- Prioritize relationship-building with wholesalers and investors—consistency and responsiveness buy you access.
Notable quote highlights
- “If you don’t get a ton of return…this first deal doesn’t have to be a huge moneymaker.” — Advice to accept less on early deals to gain experience.
- “Wholesalers value certainty…they’ll call their closest buyers first.” — Key to accessing top wholesale deals.
If you want a one-line summary: prepare multiple financing options, build a small track record and reserves, cultivate relationships with wholesalers and investors, and be willing to trade upside for access and experience on your first deals.