0% out of pocket with hard money loan & commercial bank loan

[Sawyer Scott]

I am currently looking into purchasing an apartment complex. I would like to utilize creative finance to create a 0% out of pocket solution when purchasing.

For those of you with more experience in commercial real estate, is it possible to use a hard money loan as a down payment for a commercial bank loan? If so what may be the pit falls off doing so, that is other than high risk and interest rates.

Cheers

Sawyer Scott

[Matt Hurley]

Most hard money loans I’m aware of require their lien to be in first position. A commercial mortgage requires the same. 

People I’ve seen achieve what you’re describing do so with a partner. The partner provides the down payment, you’ve provided the deal and will need some sort of involvement after purchase (like managing the property). Profit split and exit strategy to be negotiated.