Step 10: Fund the Deal — Other People's Money

Step 10.1 — The funding menu, honestly described

For a wholesale assignment, you may need no purchase funding at all — your buyer funds the closing. To close yourself, the usual sources are your own cash, a partner's cash, private lenders (individuals you know), hard-money lenders (businesses that lend short-term on deals), and conventional or portfolio loans for holds. Each has a price: interest, points, fees, speed, and how much of the price and rehab they will cover. None covers everything, and any lender promising to should be verified twice. Your job is to match the money to the exit you chose in Step 1.

Step 10.2 — What lenders actually underwrite

Lenders price risk, not enthusiasm. They look at the deal's numbers (ARV, repairs, purchase price — your Step 5 worksheet), your experience, your cash in the deal, and your exit. A first-time borrower with a strong deal and real cash reserves is fundable; an experienced borrower pitching a thin deal is not. Bring a complete package: contract, comps, rehab estimate, timeline, and exit plan, in one organized file. The operators who get funded repeatedly are the ones whose packages answer questions before they are asked.

Step 10.3 — Price the money into the math before you borrow it

Interest, points, draw fees, insurance requirements, and extension costs belong on the worksheet beside holding and selling costs — before you sign a contract, not after. On an illustrative example only, borrowing that adds several thousand in financing cost lowers your maximum offer by roughly that same amount; the MAO discipline from Step 5 absorbs funding costs, or the deal absorbs you. Model the timeline honestly too: if the rehab runs long, what does each extra month cost, and does the deal still work? If it only works on the fastest timeline, it does not work.

Step 10.4 — Protect the people whose money you use

Private lenders are often friends, family, or local investors whose trust is your real credit line. Use written notes and deeds of trust prepared or reviewed by an attorney, never a handshake and a promise. Pay on time, communicate before a problem becomes a surprise, and never borrow against a deal you would not fund with your own money. One burned private lender ends a funding career in a small market, and markets talk. Your reputation with lenders, like your reputation with sellers and buyers, is a compounding asset — guard it accordingly.

Step 10.5 — Build funding before you need it

Meet lenders when you have no deal: attend the meetups from Step 3, ask what they fund and what they avoid, and keep notes. When a contract lands, you want a short list of lenders whose criteria you already know, not a weekend of cold calls. After each funded deal, debrief the lender: what worked, what they want to see next time. Funding gets easier with every clean repayment and harder with every excuse. By Step 16, those relationships become part of the system that lets a second and third deal run at once.

Do this step now

Do not just read this step — work it. Open the Flip Profit Calculator and run one real or practice property through it, then read the full guide for this step: Funding Deals with Other People's Money. Write down what you produced — a number, a list, a decision — in a deal file you will keep. Every later step assumes that artifact exists. If a term on this page is new to you, the glossary defines it with a worked example, and the topic hubs gather everything on the subject in one place. Progress in this business is mostly finished paperwork and honest numbers, repeated until they compound.

How you'll know this step is done

This step is done when you can point to the artifact it produced — a written decision, a worked number, a list, a signed paper, or a log entry — and explain, in plain language, how you got it and what would change it. If you can only say you read about it, the step is not done yet, and moving on anyway is how gaps hide until a live deal finds them at the worst price. It is also done when you know your own weak point inside it: the input you estimated instead of verified, the conversation you are avoiding, the deadline you have not calendared. Name that weak point in your deal file and give it a date. Steps in this path are not school subjects to pass once; they are stations you will revisit on every deal, faster each time, because the artifact from the last deal becomes the template for the next one.