What do I not know?

[Kathryn Freeman]

Hey all! I'm new to BP and so excited to buy my first house as an investment. It's actually a house in my neighborhood with a pool that I'd love to Air Bnb. We know the sellers and they're unfortunately falling on hard times and need to get rid of their house quickly. We have 10% cash we can put down, but not enough for 20% down for a DSCR loan or a conventional loan. Unfortunately, they don't have an assumable loan we could take over, they used a conventional. Would you recommend a hard money lender in this situation? Or is there another loan option I'm just not aware of yet?

[Mike Klarman]

Honestly, you can't afford the house.  10% of the value isn't even good enough for the downpayment and you still have other costs like origination, title, insurance and of course loan payments.  They may ask to see 9 loan payments in reserve.  Even a private lender will not lend you 90% of a 30 year loan program.