Financing advice

[Travis Francis]

I am negotiating the purchase of a property that is slightly different than my normal transaction and I need help with ideas on options to finance the deal. I typically do a standard fix and flip with hard money and am in and out of the deal in 3-4 months. This property I am negotiating is worth approximately 475K and I should be able to purchase it for 300K. It needs approximately 20K in improvements. What makes this one different is that the neighborhood that it is in has many homes for sale and they are moving slowly. I have lived this neighborhood for 17 years and have an intimate knowledge of it. I have watched the cycles and know that things will trend back in a more positive direction at some point in the future. I am prepared to hold it for awhile, as the rental market is strong and I could cash flow the property while I wait for the right time to sell. Again, this is not my normal deal, but there is enough equity in the property that I feel like it is worth waiting on.

I am not able to qualify for conventional financing at this time, so a straight up mortgage is not the solution. Hard money has too short of an expiration for this deal. What would you guys recommend in terms of finding lending? My thought is that I would like to find something like 20-30 year amortization with a 5 year balloon at around 7% - 8%. This would allow the property to cash flow and give me time to watch the market and exit the "slow flip" when it made better sense.

Any advice and opinions are much appreciated.