Financing & Funding Your First Deal: A Beginner’s Guide to Getting the Money to Invest in Real Estate

One of the biggest roadblocks for new real estate investors isn’t finding a great deal—it’s figuring out how to pay for it.

You’ve been researching markets, analyzing properties, maybe even going to open houses. You’re excited. You’re ready. But when it comes to funding your first investment, you hit a wall.

Do I need 20% down?
What if my credit isn’t perfect?
Are there other options besides going to a bank?

If you’re asking these questions—you’re not alone.

Financing your first deal can feel overwhelming, but here’s the good news: there are multiple paths to success. You don’t need to be wealthy, and you don’t need to know everything before you start.

In this post, we’ll break down seven beginner-friendly financing options (and smart tips) to help you get the funding you need to close your first deal with confidence.

Let’s get you moving—from overthinking to owning. 💼

1. Start With House Hacking 🏡

House hacking is one of the easiest and most powerful ways to get started—especially if you don’t have a ton of money saved.

What is it?

You buy a property (often a duplex, triplex, or even a single-family home) and live in part of it while renting out the other units or rooms.

This lets you:

  • Qualify for low down payment loans (3%–5%)
  • Offset or eliminate your housing costs
  • Start building equity from day one

✅ Action Step: Look at FHA or conventional loans that allow low down payments for owner-occupied properties. Search for 2–4 unit properties in your area and run the numbers.

Takeaway: House hacking can be your gateway to owning rental property while lowering your cost of living.

2. Use an FHA or VA Loan (If You Qualify) 💳

Government-backed loans can make your first deal much more accessible.

FHA Loans:

  • 3.5% down payment
  • More flexible credit requirements
  • Can be used for 1–4 unit properties if you live in one unit

VA Loans (for veterans & active military):

  • 0% down
  • No PMI
  • Excellent terms

✅ Action Step: Talk to a local mortgage broker about your eligibility. If you’re a veteran, explore VA-approved lenders for the best terms.

Pro Tip: You can combine an FHA or VA loan with house hacking for an even stronger start.

Tools That Help You Invest Smarter, Not Harder

3. Partner With Someone Who Has Capital 🤝

Don’t let a lack of money hold you back. If you find a great deal, you can bring in a money partner—someone who funds the deal while you handle the hustle.

Split profits, cash flow, or equity in exchange for the capital.

✅ Action Step: Start talking to people in your network. Say:

“I’m working on a real estate investment deal that looks promising. I’m looking for a financial partner. Would you be open to chatting about it?”

✅ Build credibility with:

  • A clear plan
  • A deal analysis spreadsheet
  • Transparency and professionalism

Takeaway: Great deals attract great partners—money follows value.

4. Explore Private Money Lenders 💼

Private lenders are individuals—not banks—who invest in real estate deals for a return. They may be friends, relatives, or local investors looking for better returns than stocks or savings accounts.

Why use private money?

  • Faster approvals
  • Negotiable terms
  • Often asset-based (not credit-score based)

✅ Action Step: Make a list of 5–10 people you know who may be interested in passive investing. Offer a secure return, backed by real estate.

Coach Tip: A well-prepared pitch and clear deal structure go a long way in building trust with private lenders.

5. Consider Seller Financing (Owner Financing) 📝

In seller financing, the seller becomes the bank. You make payments directly to them, often with little or no upfront bank involvement.

This can be a win-win, especially if:

  • The seller owns the property free and clear
  • They don’t need all the cash right away
  • They want steady income or to defer capital gains taxes

✅ Action Step: When talking to a seller, ask:

“Would you be open to financing the sale directly if we agree on terms that work for both of us?”

✅ Learn how to:

  • Structure payments
  • Write a promissory note
  • Close safely with legal documents

Takeaway: Seller financing is one of the most flexible, underused tools in real estate.

6. Use the BRRRR Strategy 🛠️

BRRRR stands for:
Buy – Rehab – Rent – Refinance – Repeat

It’s a method where you:

  • Buy a distressed property (often with short-term funds)
  • Renovate and increase value
  • Rent it out
  • Refinance to pull your money out
  • Repeat the process

You can start with a hard money loan or a private loan, then refinance into a long-term mortgage.

✅ Action Step: Look for underpriced fixer-uppers in solid neighborhoods. Partner with a contractor to estimate repairs and build a BRRRR timeline.

Pro Tip: BRRRR lets you recycle your original capital—and build a portfolio quickly.

7. Join a Local Real Estate Investing Group (REIA) 🧑‍🤝‍🧑

Your network is your net worth—especially when you’re just getting started. Local REIAs are filled with:

  • Private lenders
  • Mentors
  • Potential partners
  • Lenders who specialize in investor deals

✅ Action Step: Search for “[Your City] real estate investor meetup” or “[Your State] REIA” and attend one event this month.

Takeaway: Relationships = resources. Don’t try to do this alone.

⚠️ What to Avoid When Funding Your First Deal

1. Overleveraging or Taking on Too Much Debt

Just because you can get funding doesn’t mean you should. Make sure your property cash flows and you have an exit strategy.

2. Not Understanding the Terms

Always read the fine print. Watch out for:

  • Prepayment penalties
  • Balloon payments
  • High origination fees or junk charges

3. Waiting for Perfect Conditions

Yes, you want a solid deal. But don’t get stuck in analysis paralysis. You learn the most from doing your first deal—not from endless research.

Final Thoughts: You Don’t Need to Be Rich to Start Investing

One of the biggest myths in real estate is that you need:

  • 20% down
  • A perfect credit score
  • A six-figure income

The truth? You need education, creativity, and the courage to take the first step.

Whether you use a government-backed loan, house hack a duplex, or bring in a partner—there’s a way forward.

Every successful investor started with deal #1. Make yours happen this year.

✅ Ready to Fund Your First Deal?

If you’re serious about getting into real estate but unsure how to pay for it, you now have the tools to move forward. Start small, start smart, and stay consistent.

You’ve got this. 🙌

Start Funding Your First Deal Now

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