Can't afford 2nd Down Pmt: Better to Wait a Year or Hard Money?

[David A.]

Hey all! As always, really appreciate the sagely wisdom around this website. 

I'm going to be closing on a duplex mid-November (FHA 3.5% so I'll be living in it for a year), BUT I found another duplex in my searches that I fell in love with in-person and they just dropped their price significantly. The numbers also definitely make sense. I'm not interested in backing out on my current duplex buy, but I don't have enough $$ to put a 20% down payment on this second duplex at this time. I guess my question is - am I better off waiting a year and getting together enough $$ to purchase that second duplex as a conventional (or even FHA) buy, OR is it it worth exploring a hard money loan to jump on it before it hops off the market? Will I be able to find a hard money lender who's willing to lend to someone with basically no cash for anything but closing costs? The home is listed around 115, likely can get it down to 110, requires about 7k in repairs, and rents at 1850/month. EOY profit between 5,000-5,500 after all expenses. I've got... maybe 3-4k after this closing to contribute.

If you think going the hard money route is a good idea, I'd also appreciate any names/companies y'all wanted to point me in the direction of! I flipped a house I bought in 2017 earlier this year and am interested in buy & hold for the next decade or so!

[Jaysen Medhurst]

@David A., I doubt the new duplex is a good candidate for HML. Does't seem be enough value-add opportunity. Remember, when you refi out of the HML, you'll need 20% equity. Your $7k of reno isn't going to add the $40-50k of value needed.

I'd look to partner up on that property. Find someone to bring the $35-40k needed to get that deal done.