Private Money / Bank Financing

[Ramsey Howard]

Can someone give some advice on how using private money for a down-payment combined with Bank financing for the rest may work. Advice on doing this in general or strategies to make it easier on the banking side of things. I am looking at doing a deal where a private investor would be providing the down payment and the rest would be financed with the bank. The investor doesn't want to be involved in the bank side of things only wants a formal agreement between us for the down payment portion of they're investment. Thanks!

[Andrew Postell]

@Ramsey Howard yes, two important items for what you are describing:

1. It sounds like the private investor wants to make sure that the mortgage is not in his/her name. So you would need to qualify for the mortgage on your own. Even if you put the property in an LLC name it would be likely that you will still qualify for the mortgage personally.

2.  When receiving funds from a non-related investor it is important that you have that money in your account for over 60 days (at least the time to generate 2 monthly bank statements).  If you have a large deposit in your bank statements then it must be sourced.  And receiving funds from a non-related person will not be permitted for a conventional loan.  A portfolio loan may not have this option (but some do) but portfolio loans carry a higher rate.  So if you have the ability to have that downpayment money in your bank for enough time to generate 2 statements that won't show that deposit that would be the best method.

Feel free to ask more questions if you need but I hope this helps.  Thanks!