Using private money for down payment ?

[Christian Podedworny]

At this time I’m looking to acquire a large 72 unit deal with OPM for most of the down payment. 

Example:

Purchase price $5,000,000

Down pmt:    $1,250,000

Amt:   30 year 

Interest: 4.5%

Interest only period: 3 years 

If the property will bring in an 8% return and I’m going to have $750,000 and the debt partners would finance the remaining $500,000 for the down payment I think this would work. 

The debt partner would receive 6% interest for 4 years and then their initial investment would be paid back at year 4. 

What are your thoughts ?

Would this strategy work and would it be risky ?

[Caleb Heimsoth]

You may have a hard time finding a commercial loan at that interest rate