Using someone else's money for a down payment

[Ben Clark]

Hello everyone,

I'm sure this has been asked before, but when I searched I couldn't find anything. I have someone who wants to be the down payment on property but doesn't want anything to do with the property and just wants the down payment paid back. How can this be set up so a bank is ok with it. This person is willing to jump through the necessary hoops, but I'll own the property and manage it. This person wants to be totally hands off.

Thanks!

[Owen Dashner]

I have done this exact scenario a bunch of times. It is absolutely possible. You will need to create a business entity based on your collective goals and business structure.  The operating agreement should spell out who is responsible for what (i.e. your role is day to day operations, his role is to cough up the dough and that's it). Have an attorney draft the agreement, get your new biz registered with the Secretary of State, get an EIN.  Now you will be ready to go to a commercial lender for the loan.  They will require 2 to 3 years of tax returns, and a personal financial statement from the partners.  You will also likely need to each personally guarantee the loan.  Small, local banks and credit unions are great to work with on these.  

Good luck!