Getting a small apt complex under contract

[Avi Garg]

Need some help in understanding how to get a MF under contract. Lets say the small apt complex is listed at $300k and the seller is willing to drop the price to $280k (no seller financing available). 

1. The conventional way to do this is to have 25% as down payment and find a commercial lender (LLC required) and get approval letter to get the complex under contract

2. I read someplace (can't remember where) that I can try to find a rich friend/family to give me a screenshot of their account with the money (name scratched off) and I can use that to get the complex under contract and then find the investors. The only issue with this is I thought the bank screenshot should have your name on it.

3. Find HML who will be willing to put in 80-90% so you can get the property under contract

4. Any other way I am missing out (100% cash offer is out of question for now)?

(these are made up numbers to put things in perspective)

Another question I have regarding commercial loan is that does the bank look at where the money came from? Lets say I have 30k and the rest I get from 0% credit card (I know the risks so lets not point the credit card risks).

[Gerald Demers]

Hello @Avi Garg, the biggest question a seller has is "can you close"?  Thus, they need proof you will have the cash (however you choose to raise it).  If they say yes to your contract and you can't close, you cost them money unless you can address that.  The easiest way is that you are putting down a deposit, if accepted, you have x days to do your due diligence and once that date is passed, your deposit becomes non refundable (deposit goes hard).  

This is a 280K multi-family as opposed to 750+K purchase.  Not saying that's bad; I just look at the two prices and the situations they can create as different.  

If you have a private lender (HML or private) that can lend on the project, sure, get a letter from them indicating their commitment to the project.  The letter should include contact information so the seller can call and verify.  It does not mean you have to use them.  

Regarding your 30K, most conventional lenders's paperwork ask you for the source of your down payment.   If you don't have the down payment, run your numbers on the property and see if the income supports the additional debt if you borrowed the down payment and at what interest rate you could offer.  

If it's a great deal, you can partner with someone that has the down payment for a % of equity (so it's not debt).  

We have purchased all of our properties with 100% financing from private lenders.  But we bought them at heavy discounts, completely rehabbed them so the LTV is about 60%.  Nice safe investments.  

Gerald Demers