How to finance a rental, they want all cash

[Carlos Araujo]

Hi guys, I’m having a dilemma, I found what I think it’s a good property in an up and coming area of New York. Property is pretty run Dow. It probably has fines and violations to settle with the city, but I believe it’s a good deal due to the area being renovated. I want to keep it as a rental property but they want all cash AS-IS, I have been Pre-approved for a mortgage a few months back but my credit has declined due to school and a new car. I’m sure I can get still get a mortgage on it but how would I go about buying cash. I was thinking of using a hard money lender, any ideas would be helpful thank you

[John C.]

Most hard money lenders I know are charging 2 points, and 10% interest. They usually want you to put some skin in the game, so you might have to put down 10-30% down payment, depending on the deal and your experience. I invest in the NYC area where land values can easily exceed the physical house value, so run down doesn't mean too much. But you should be very weary of NYC's DOB and ECB violations, they can be a headache to deal with.