How did you raise a large down payments when first starting out?

Question

I have one duplex at the moment but I am looking to expand. I house hacked my first property on an FHA loan 6 months ago. Things are going well and I would love to purchase a deal I found that is going to be great. I have a partner to go in half with me but I need a strategy or plan to get the 15000 cash that I need for the down payment on this next deal!

Daniel Hanson · Answer

Are you sure it is not a 5 year term with a 20-year amortization?  If it is the longer amortization your payment may be lower, but you would just have a balloon payment at the end of the 5 years and the possibility to refinance.

Dylan B. · Answer

@Shane Collins I have all my rentals under an LLC which I have to do commercial loans if I am receiving funds from the bank.  Those are 15 year loans which are variable every 5 years. Risky, however the way I look at it is, if the interest rates are increased after the initial 5 year period your rental income should increase along with that.  Being competitive with the market of course.

George Smith · Answer

Yeah. I'm a little hesitant on anything that's not at least 7-8 years out although I kind of feel that the economy will absolutely crash if they keep raising rates. We've been living on cheap money for far too long.

David Dachtera · Answer

HELOC = Home Equity Line Of Credit

Note that you may need to take a draw from the HELOC, then "season" it in your savings / checking account for a period of time. Your prospective lender can provide some guidelines. Lenders typically don't like down payments to be borrowed money. Seasoning usually resolves that issue.

Bob Okenwa · Answer

Have you considered using a HELOC to get the funds. Or you can try raising private capital through friends and family.

Shane Collins · Answer

Met with the bank, That is exactly what it is. Good call and thanks for all the replies. 5 yrs sounded weird. Makes much more sense now! Sorry I am new to all of this.

Shiloh Lundahl · Answer

@Shane Collins I used a HELOC to get started.  Then I started using other avenues of credits such as credit cards, personal loans, business lines of credit, and private money.

Ian Walsh · Answer

I wholesaled until I had the money.

Shane Collins · Answer

Agreed.

How did you raise a large down payments when first starting out?

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