Interesting deal but no money - options?

[Andy D.]

Dear BP community, this might sound like a bad joke but I'm honestly asking about how I could go about this, if there is indeed anything that I can do.

Following simple situation: I found what looks like a great deal and I would like to look into this closer and buy the place (if all pans out). However, I don't even have the cash for the required down payment when financing, not to mention for paying cash.

So I thought of a hard money lender (hml). My problem is that I don't want to flip, but buy&hold (for cash flow). So there will be no quick win for the hml in that respect. Also, I would ultimately put a mortgage on the place eventually (also to be able to pay back the hml), but that will probably take at least some 6 months before I can get the cash together (reserves will the issue, as I already own a bunch of mortgaged places; obviously no down-payment needed as I'd be pulling out equity).

In addition, I could only bring about 10% of the purchase price at the time of the purchase. So in essence I would be looking for someone who is willing to give me pretty much the full purchase price in cash (or more likely, wire it to the seller) to buy the place, then have me pay him/her interest (need reasonable rate) and waiting for me to pay him/her back. Timeframe, resonably, at least some 12 months. At least.

My main concern is the fact that even if I ultimately get a mortgage on the place I still don't have enough money to pay the hml back in full at that time as the equity will be some 70% only (lenders require me to "bring" 30%). So that means that I need, till then, have to have gathered the difference in cash via savings. That's why I am more looking at a timeframe of 18-24 months. I do have a steady, good paying job, so getting the money is not the issue. I just need time.

Has anyone ever done anything like this? It would be my first experience with a hard money lender - have no idea what can be reasonably expected. Property, btw, would be in UT, multi-family.

Also, I have not even looked at any figures yet. Depending on the interest rate for the hml this could be unprofitable, at least for the time during which I have the hml loan. Yeah, the place might appreciate, but we all know that this is not a given. NOI/cash-flow needs to be the driving factor as far as I'm concerned.

Curious what you'all think about this?