Creative ways to get 30k for a down payment on a already cash...?

Question

Hey Guys, we came a cross a deal that is a rental property thats currently cash flowing and has long term tenants in place. The owner is offering seller finance with 30K down and a 2.89% rate. We really want this deal but don't have 30k liquid at the moment and this deal is too good to pass up. Any suggestions would be great! We have thought about going conventional but just wanted to hear what you guys would do in this situation!

Best,

Burke Fisher

Best,

Burke Fisher

Ryan Blake · Answer

@Burke Fisher Sounds like a great deal. It just may be hard to do without any cash. I think your best bet is going to be going to family for down payment help with a clear payback plan or to talk with the current owner to lower the down payment to something that you can afford. How much cash do you have?

@Karl Denton has some great ideas on how to attempt to raise the funds yourself. I agree with him that hard money lenders won't want to touch it because they will be in second lien position and I don't know of any lenders in the area willing to do that right now. It would also be hard to find a bank that would give you money on a second lien position on a deal like this unless you have a good working relationship with them and plenty of capital in their bank which I am assuming you don't if you are looking for the $30k for a down payment. Karl's other options are great thought. 401k loan, partnering, HELOC on another property. Those are all good options to pursue.

Hope this works out well for you!

Tom S. · Answer

@Burke Fisher  I've used both Discover personal loans and SoFi in the past for the amount you're talking about.  Discover offered $35k and SoFi $50k.  They run a soft credit pull, will tell you the rate and terms, and then you can choose to proceed.  I ended up going with Sofi, very smooth process and everything approved in about 1 day, funds in my bank account the next day!

Rates are slightly higher, around 12%, but no fees at all to get the funds, and no pre-pay penalties.

I would definitely check either of those sites.

Scott Wolf · Answer

@Burke Fisher, a lot of Credit Card companies will offer personal loans.  The rates are higher, but whoever you currently use, check on their website, and they'll usually give you a quick amount you're pre-approved for.

Kerry Baird · Answer

I'd also make every effort to complete this deal.  Ask family, 401k loan, sell something.  Get creative! Seller financing is soooo much better than bank financing, in my experience.  You have built rapport...make this happen.

Post back for accountability what steps you have taken.

Burke Fisher · Answer

@Karl Denton I appreciate all of your suggestions, however i do not obtain a mortgage right now that i can borrow against. I will look into some local banks. PP 145k it has also been recently remodeled. There are tenants in place paying $1500 a month. Owner is willing to finance at 2.89% with 20% down. Property is located in FL.

@Ryan Blake I agree on the HM and 2nd position lien. I am trying to negotiate the 20% down with owner, I only have about 10K liquid at the moment. I have money tied up in other projects till April/May and don't think this property will last. Also super cheap money at 2.89% hard to pass up. Going to keep looking for creative ways to get this done. I appreciate all the info!

Karl Denton · Answer

You could use a hard money lender but since the seller is offering the financing probably wouldn't be my first choice either. Currently with rates you can do a cash out refi if you have a home or property already, even simpler you can do a HELOC loan which is a line of credit on a mortgage you currently have. There's other moves like borrowing against your 401k or other savings retirement plan. Another idea would be to go in the deal with someone else and 50/50 split or whatever works, at the end of the day its better to own some of it then none of it. Just look at all these avenues and see what works for you financially, if its a great deal you have to find a way. Also talk to local banks as well, depending on purchase price you may find smaller banks offering to do only 10% down depending on the loan. Need a little more detail on price and your finances to be any more of a help. Good Luck!

Burke Fisher · Answer

@Kerry Baird Currently trying to negotiate down payment with seller. Im looking into all options to lock this in.

I'll keep my steps posted!

Joe S. · Answer

Can you tell a little bit more about the property that needs a 30,000 down payment? I don’t recall seeing that. 30,000 down on some properties is a drop in the bucket 30,000 for another property could be half as much as it’s worth.

Burke Fisher · Answer

Hey Guys, just wanted to give everyone an update. We did not find a way to a get the down payment so we had to pass it up unfortunately. We could have used SoFi but the interest rate was bonkers and didn't leave us with much cash flow on the table. I'll probably regret it forever that we didn't get it but, oh well you live and you learn. Thanks so much to all of you!

Karl Denton · Answer

@Burke Fisher ya, so I would go around looking to get a personal loan, even if the rates are higher cause it will be worth it. But even try borrowing money, ask a close friend or relative to get in on the deal even. Good luck!

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