investing with partners

[Alex E.]

Hi everyone,

I have a friend who is willing to cover the downpayment for a multi-family or apartment building, which is around 20% of the loan amount. I am also planning to apply for a commercial loan since a lender is more concerned about how much income the property will generate than one's credit history, and since I don't have a steady work history.

I am planning to pay my friend back with interest for the downpayment he is going to cover. I plan to pay him back with the income from the property.

So I have two questions:

Will a lender allow me to have my friend cover the downpayment in addition to me paying back my friend with interest?

And with a commerical loan, it is more about how much income the property generates rather than my "ability to pay" and my work history?

Thanks.

[Aaron Mazzrillo]

That is a myth that commercial lenders only care about the income the property produces and not the buyer's credit or income. Of course they are going to look at you.

How many units are you planning on buying? 4 and less isn't commercial. If you're looking at 5+, you'll probably need around 30% down in order to get a loan. You should buy it with your partner and pay him out of rents until he is paid back.. If there is enough rent left over after expenses and debt service. Based on your very vague post, I'm thinking you should learn the business a tad bit more before you put your friends cash at risk though.