Short on closing costs

[Jon De Jesus]

Hi BP Community, 

This is my first post and I need some advice. I am working on getting my second long distance rental and I'm short on closing costs. I'm in contract, the property is located in a small mid-west town and I've had a duplex rental there for 2 yrs which has been going well with property management in place. The new property is $45k SFR and I have the downpayment but I will be short on the closing costs. My current prospective loan structure is at 15% down, $6,750, and the total at closing will be around $11k with prepaid taxes and ins. After reviewing my finances, I will probably be around $4k short for closing. My lender mentioned that I can't use gift funds for investment properties so how can I close the gap? I thought I saw a video that Brandon T. partnered on many deals with his partner fronting the down and he would carry the loan and liabilities. I considered that here but I was told I can't get gift funds for the loan. I need some ideas please. Thanks in advance.

Regards, 

Jon

[Alex Rodriguez]

@Jon De Jesus I know someone that just closed on a 4plex and was short on funds just like you and by short i mean had too many cash deposits that would not count towards the reserves  needed. Basically same situation though. The way he was able to get funds accepted was to "sell" a corvette he had and provide a bill of sale, release of liability, and a kbb of the value. Granted the bank "Lender" does not and nor should you bother to disclose who you sold it to(as in "i sold it to my brother, cousin, best friend"). his best friend decided to "buy" the car from him and he will be "buying" it back immediately. The loan was processed with no issue, they just want to see where the extra cash came from, a legitimate place that wasn't a personal loan or gift. Hope that may help as it was the only way for this person to close ;) "sell" what you can and use that as funds.