Any ideas on creative financing for your downpayment?

[jtmoniii]

I'm looking at two duplexes now and wanted any and every idea for a creative downpayment.

I was thinking about a high interest rate loan. The reason being is that if 80% of your loan is at 4% then the rest of the 20% of your capital structure is at 10%. This means your blended rate is around 5-6% - which is very cheap money.

The two duplexes should rent for around $500/door - total monthly gross cash flow of $2,000.

Thanks in-advance for the replies.

 

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[NJRealEstate]

plan is great on paper, unfortunately for it to work both lenders must be comfortable knowing that you have none of your own money invested in the deal. In their eyes this makes you very likely to walk away from the property if faced with some tough times like vaccency, or major maintenance issues.
Traditional lenders will not allow you to be 100% leveraged. You will need to have seller financing, seller carry back of the second loan not secured by the property, and/or deceive one of or both lenders. You can use your credit card line of credit if it is enough to cover the need, however it will show up on your credit report and thus lower the amount the first position would lend to you.
You could look for a 4plex, get traditional FHA financing, only need 3.5% down and then rent the other 3 units and live for free with the possibility of positive cash flow if you found a great deal.
If you want to get into REI beyond wholesaling or getting your agents liscencse then cash is king

 

[jtmoniii]

NJRealEstate - thanks for this information. Ironically enough I actually work at a bank in underwriting, but it's funny how you go braindead when it's your own deal. Also, I just do commercial lending, no FHA deals or secondary market deals.

What companies provide high interest rates lines of credit? AMEX?

Can FHA loan to a company?

 

[DeletedUser2]

the seller is a good bet financing if they are motivated

 

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[CashFlowDepot]

Get the seller to refinance. They have the track record with the property. They can pull out the cash they need.

The you buy subject to the financing.