Can I use hard money as a down payment on a commercial loan?

[Tyler Hardy]

I've never used hard money lender before, I was wondering if it's fairly common to use a hard money loan for a down payment on a commercial mortgage. I understand that hard money is generally geared towards the purchase of a property so let me give you the scenario I have in mind.

I'd like to get into larger multi-family but the up front capital is holding me back. My plan is to use a HELOC to secure a hard money loan. Then use the hard money loan to secure a commercial bank loan. Am I crazy? Does this work?

[Craig Jeppesen]

Probably not. Lenders will want equity from you. To them that is still 100% financing. Now if you have a ton of equity elsewhere for the hml and a good plan to pay it off quickly then maybe.