Creative Finance Question
Hi,
I'm looking at a property on an Island to use for Airbnb & VRBO. The home is currently used for this and making great numbers. Based on the actual numbers given my profit margin should be around 40-45% of gross rental revenue. My issue - like most people is down payment. I spent $100k down on my last rental investment two years ago and that left me short on cash. While the rental is doing great it doesn't afford me a ton of cash. However the rental property has a good amount of equity. Should I leverage as much equity as possible to try and purchase the next property? Would it be better to find a private money lender that will do the deal? I could also contact the sellers to see if they will finance for 2-3 years before getting a loan when interest rates come down (surely they'll come down). I just think from what I've seen everyone is going to want 20-25% down and if I had that in my pocket I would have already walked in to a bank to get a loan. I'm looking for a way in to this deal without a huge down payment. I've heard some private lenders will buy the property at 100% and sell it to you. Is that true? Thanks in advance for reading.
Thanks,
Jeremy
I'm looking at a property on an Island to use for Airbnb & VRBO. The home is currently used for this and making great numbers. Based on the actual numbers given my profit margin should be around 40-45% of gross rental revenue. My issue - like most people is down payment. I spent $100k down on my last rental investment two years ago and that left me short on cash. While the rental is doing great it doesn't afford me a ton of cash. However the rental property has a good amount of equity. Should I leverage as much equity as possible to try and purchase the next property? Would it be better to find a private money lender that will do the deal? I could also contact the sellers to see if they will finance for 2-3 years before getting a loan when interest rates come down (surely they'll come down). I just think from what I've seen everyone is going to want 20-25% down and if I had that in my pocket I would have already walked in to a bank to get a loan. I'm looking for a way in to this deal without a huge down payment. I've heard some private lenders will buy the property at 100% and sell it to you. Is that true? Thanks in advance for reading.
Thanks,
Jeremy
Most Popular Reply
I wouldn't necessarily say that finding 100% financing is impossible, though it's very unlikely. I've seen people have more success with 100% financing on seller financed deals, but the other half of this is having a great relationship with a private lender that will accept 2nd position. And the deal must be good :)