Sep 11, 2018

After coaching so many people through the process of buying cashflow properties and replacing their income…

I’ve arrived at a “framework” that I have my clients follow.

This 9 step process is the most logical and effective way to build your portfolio.

So far, we’ve covered:

Step #1 - Pick Your Market
Step #2 - Build Your Team
Step #3 - Getting Setup

In today’s post, I’m going to cover Step #4 - Find The Money


Finding the money is maybe the most important step.

Not because it’s hard.

Because it gives you the most CONFIDENCE to move forward.

(And mindset is everything)

Here’s an overview of your major options when it comes to financing rental properties:

Residential Lenders

  • This is your typical mortgage lender. They do 30 year fixed loans at the lowest interest rates. You can only get 10 maximum, you need 15-20% down, and there’s tons of paperwork. But if you can get approved for them, and you have the cash for the down payment, these are good loans because of the low interest rate and 30 year term. 

Commercial Lenders

  • This is similar to residential lenders, with a few key differences. Commercial lenders typically lend on commercial properties (5 units and up, and commercial buildings like strip malls, office buildings, etc.) but they can also do loans on single family. The loan products they offer are usually 5 to 10 year balloon loans, with comparable interest rates to conventional. Getting approved can be easier (less red tape) and there’s no limit to how many of these loans you can get, as long as your banker approves. 

Private Money

  • This is one of my personal favorites and one you hear me talk about a lot. Private money lenders could be anyone from your parents, to a friend, to a local investor in your market. Typically they do anywhere from 6 months to 5 year terms, although there’s exceptions. Interest rates are higher, but there’s not much paperwork, and they aren’t asking you about your credit score or income or any of that. They only want to know what the property is worth and then they give you a % of that. I love these loans because they’re less of a hassle. 

Hard Money

  • I wouldn’t recommend this for rental properties. Interest rates are very high and the terms are too short. Hard money is more used for short term flips and what not. It’s “hard” to deal with. 

Seller Financing

  • I haven’t done one of these, but I hope to soon. You basically have the SELLER be the bank and hold the note. So instead of doing a 5 year loan with a bank, you do it with the seller. A third party company receives the payments and forwards to the seller, keeping track of everything. Consult your attorney to get the paperwork drawn up correctly. This option is cool because you can negotiate things like the down payment, and even get into properties for $0 down sometimes. 

Cash Out Refinancing

  • This is an option you would use if you had a chunk of equity in a house and you wanted to use it to fund further purchases. Private money lenders, commercial, and residential will all do these for you. This is a great strategy to keep your money moving “forward” to future purchases. 


  • Home equity line of credit. Another option if you have equity. Get the “line” established and it doesn’t cost you anything until you tap into it (use it). Interest rates are low, and it’s basically same as having cash. Refi out later into a 30 year loan and pay back your line of credit, freeing it up to use over and over. 

Those are the main ways to most investors finance houses. Which of them seems best for you?

I encourage you to talk to some lenders. Face your fears. Take some action. You might find that getting funding for your properties is easier than you think, and is truly realistic for you. 

If you are interested in a more comprehensive training on how to get your business “set up” for success, check out our 12 House Masterclass which includes not only includes a module on this, but also:

  • A comprehensive 50+ video training course on how to get your first 12 houses
  • Monthly group coaching calls with me
  • Access to our private, closed Facebook Group where you can ask questions to your heart’s delight
  • Access to my private money lenders
  • Coaching Call Recordings
  • A “Freedom Artist” T-Shirt
  • And much, much more!


In my next post, I’m going to cover Step #5 to getting your first 12 houses, which is…

Find the Deals!

This is a crucial step. Knowing how to find discounted deals is everything in this game.

I’ll show you how to do it, WITHOUT spending any money on marketing or EVER talking to a seller. 

Look for my next post. 

Talk soon!


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