Discover three proven strategies beginners can use to break into real estate: creative financing, using private money (OPM), and starting small with high-leverage loans. Real-world examples, clear guidance—everything needed to get in the game.
- Learn how master lease agreements and seller carry second mortgages can help you bypass traditional lending barriers and take control of cash-flowing properties.
- See how one of our students closed a 12-unit deal with just $25K of her own money—and how you can do the same by structuring smart partnerships.
- Explore why beginning with a fourplex or smaller residential property can be the smartest move for long-term wealth building, and how FHA or VA loans can make it even more accessible.
Turning Frustration into Solutions
The journey into multifamily real estate can be both exciting and frustrating. You’ve got the drive. You’ve got the vision. But every time you look at a deal, it’s like high prices slap you in the face. Between soaring interest rates, stubborn sellers, and deals that barely cash flow, it feels like the game is rigged to keep beginners out. But the game isn’t rigged—it’s simply misunderstood.
When access, capital, or knowledge seem to be barriers, strategic action and creative problem-solving can bridge the gap. Here are 3 proven techniques that will help you secure your first multifamily investment—no matter where you’re starting from.
Solution #1: Creative Financing
The first solution is creative financing, a strategy you absolutely must learn in today’s market. Creative financing steps in where traditional lenders fall short. Whether you have money but weak credit, or strong credit but limited funds, these techniques can unlock the doors to ownership.
Strategy 1: The Master Lease Agreement
The Master Lease Agreement (MLA) is a powerful tool used primarily in commercial multifamily investing. Unlike a traditional lease option, an MLA does not provide an option to buy—it includes a commitment to purchase.
Key benefits of this structure:
- No bank financing required
- No credit checks or appraisals
- Flexible down payment (often around 10%)
Unlike a traditional lease option, an MLA does not provide an option to buy—it includes a commitment to purchase. That distinction matters because it gives the buyer full control of the property, including:
- All operating income
- Tax benefits (excluding depreciation)
- Strategic upside
Meanwhile, the seller benefits by avoiding capital gains taxes—because it’s a lease, not a sale. When executed correctly, this strategy allows you to take control of a property, build equity, and execute a plan to buy it outright—on terms that work for you. That’s why so many of our mentoring students start here.
Pro Tip: A properly structured MLA includes an exit strategy for fulfilling the purchase agreement. And that’s where expert guidance can make all the difference.
Strategy 2: Seller Carry Second Mortgage
This method comes into play when you’re short on the down payment a bank requires. For instance, if a lender requires 25% down and only 15% is available, the remaining 10% can be covered by the seller.
This works by:
- Structuring a first mortgage with the bank
- Having the seller finance the remaining down payment as a second-position loan
- Making the seller effectively a secondary lender
This approach makes the seller’s property more attractive, especially if they’re asking for top dollar, because it helps you make the deal happen. The seller becomes the lender for a small portion of the deal, and you both win.
Why Creative Financing Is Essential Right Now
These techniques are essential in today’s market, where affordability is tight and lending requirements are steep. They allow new investors to get into deals with flexibility, creativity, and a whole lot less frustration. I’ve broken down both strategies in my video Creative Financing, so check it out if you want to see these concepts in action.
Strategy 2: Using Other People’s Money (OPM)
Another powerful solution for how you can afford your first multifamily investment is using other people’s money—what we call private money or OPM. Private capital is a widely used method to acquire real estate without relying solely on personal funds. There are countless videos out there explaining how to structure private money deals. In fact, I have one I highly recommend: Why Raising Money Is Easy When the Deal Is Right. It breaks down the structure and approach in a simple, actionable way. But for now, I want to walk you through a real-life story from one of our students—an example that proves this strategy works, even for beginners.
Real-World Application: Soccer Mom’s First Deal
This was her first ever multifamily deal—a 12-unit property purchased off-market (which, by the way, is our specialty). We rarely buy properties listed on the open market because off-market deals offer way more flexibility and better pricing. In this case, we secured the deal for $1,020,000.
Now, if you’re raising your eyebrows thinking, “A 12-unit property for a million dollars?”—it’s not only possible, it’s common if you know where to look. This one was in the Midwest, across the street from a major SEC university. So, not a rural ghost town—but a thriving area with built-in demand.
The Challenge: Down Payment Shortfall
Here was her situation:
- The down payment required was $160,000
- She only had $25,000
- She had good credit and a home of her own
After talking to eight or nine lenders, she found one who offered 85% loan-to-value (LTV) on the deal. That’s right, 15% down on a multifamily property. Yes, these kinds of lenders exist—if you know how to present the deal and yourself effectively. And that’s exactly what we coach our students to do.
The Structure: A Simple but Powerful Partnership
Here’s how we structured the deal:
- She invested $25,000 of her own money
- A private investor contributed the remaining $135,000
- The deal was split 40/60 in ownership
- She owns 40%
- The investor owns 60%
Normally, we would want that ratio flipped. But this was her first deal, and she wanted to under-promise and over-deliver to her investor. It was about getting her foot in the door with a structure that made everyone feel confident. Now she owns 40% of a million-dollar asset for just $25,000 out of pocket—that’s substantial leverage and an entry point into ownership on a million-dollar asset.
The Lesson: If She Can Do It, So Can You
Everything our student learned, how to evaluate the deal, pitch it to lenders, and structure it with a private investor, came through our mentoring program. She didn’t start with deep pockets or insider connections. She started with a desire to learn and a willingness to act. If she can do it, so can you.
Solution #3: Start Small—and Build Big
Here’s the third strategy that can help you afford your first multifamily investment: start small. Starting with smaller properties—such as duplexes, triplexes, or fourplexes—can offer a smart, practical entry point into multifamily investing. You don’t need to start with a 50- or 100-unit multifamily investment to begin building wealth. In fact, for most beginners, I don’t recommend it. Starting with a smaller property—like a fourplex—is not only okay, it’s often the smartest move.
Why a Fourplex Makes Sense for Beginners
Starting with a fourplex gets you into the business of ownership. You’ll start to experience:
- Positive cash flow
- Tax benefits like depreciation
- Property appreciation
- Mortgage paydown
- Hands-on real-world experience
Benefits of Starting with a Fourplex
While fourplexes are classified as residential (unlike commercial properties of 5+ units), they still offer key financial advantages:
- Access to residential financing
- Lower down payment requirements (as low as 3.5% for FHA)
- Simpler underwriting
Although forced appreciation (raising value by increasing net operating income) is a feature of commercial deals, fourplexes offer an excellent training ground for property management and wealth-building. And when you’re starting out, that residential classification often works in your favor.
Powerful Financing Options (Even With Low Cash)
One of the biggest advantages to starting small is access to favorable loan programs, reducing the financial barrier for new investors. For instance, you can get an FHA loan with just 3.5% down, if you plan to owner-occupy one of the units. It’s a form of house hacking—you live in one unit, rent the others, build equity, and cover your expenses.
Case Study: Raul’s Fourplex Journey
Raul bought a fourplex about 5 or 6 years ago using an FHA loan. Fast forward to today—he just sold that fourplex to a buyer using a VA loan, meaning the buyer put virtually nothing down. Now Raul is trading up, leveraging the equity and experience he gained from that first property to purchase a larger investment.
Starting small doesn’t mean thinking small—it’s a strategic move that lowers risk, builds hands-on experience, teaches critical property management skills, and sets the stage for confident scaling. It’s a wise and proven approach for those committed to building lasting wealth through real estate.
Ready to Go from Frustrated to Financially Free?
These 3 proven strategies can help you afford your first multifamily investment:
- Creative financing (Master Lease Agreement and Seller Carry Second Mortgage)
- Using private money (OPM)
- Starting small (with a fourplex or similar residential investment)
Knowing these strategies is only the beginning—real progress comes from taking action. That’s where guided mentorship makes all the difference. For those ready to move beyond frustration and finally close their first deal, our mentoring program offers a clear plan, personalized support, and access to coaching up to five days a week. Most importantly, it provides the clarity, confidence, and community needed to succeed in today’s market.
Every Successful Commercial Real Estate Investor Has a Mentor
Get your mentor here: Commercial Property Advisors Protege Program
If you have any comments or questions, text PETER to 833-942-4516.
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