Creative financing for first deal

[Alex Bradley]

Okay so I want to buy a multi family place in my area (San Diego) but prices are crazy high for my current budget. I have an idea for a potential way to pay for the down payment but I have no idea if it makes sense or if it’s even possible. Would it be possible for me to get a hard money loan to pay for the down payment on a conventional or FHA loan? Would any lender approve that? My thought process is that I cant affoed the full down oayment on the conventional loan but I could definitely afford the down payment of the hard money loan. I understand that I would then have two loans to pay off and two sets of interest to pay off so I would have to see if that makes sense for me financially but I figured before I start running those numbers I would ask if this kind of thing is even possible. I’m also looking into partnering with other investors on a deal but if you know of any other creative ways to purchase a $700k + property with only $10k in the bank let me know! TIA.

[Chris Ellis]

The down payment on a hard money loan is always going to be higher than the down payment requested for an FHA loan. No hard money place would take second position to finance the remaining to get to the 100% you desire. FHA would also mostly likely deny you taking out another loan to cover their down payment request.

The only way to get creative financing would be going after a personal term loan, unsecured lines of credit, and/or private money. Then having the ability to source the funds and establish a relationship with a hard money lender who is willing to accept such an environment. Just getting started you are looking closer to 20% to 25% as a down payment for hard money.