First Deal - Duplex, Financing

[Tanya Rooney]

Hello BP Community! I found a duplex that I think is a stellar deal. I don’t have a down payment but really want to jump on it. I know a conventional mortgage is likely going to look for a 20% down payment. I do not have the funds to put down nor do I plan to live in it (husband and I bought a house last year for our own residence). The house could definitely use some work but it’s livable now. My limited knowledge of RE investing has been pointing me to go to a hard money lender and get a loan, put some money into it, rent, refinance BRRRR. Is that my main option or is there another avenue I should be exploring? Thanks for any information and/or advice you can provide!! Exciting!!!

[Chris Ellis]

A hard money/private lender will also look for somewhere in the ball park of 20% down payment. Be AWARE of scams that will charge you money upfront that say they can do 100%. It is just not real. The only way to get to 100% is through creative financing, which is using a combination of a couple loans to get what you need. A conventional lender will decline if you go for a second loan to come up with the down payment. Only real option is a private lender that will accept a second source of coming up with down payments funds. 

Then this second piece of funding would come from a personal loan, business term loan, unsecured business lines of credit etc...