Bank Loan for a Down Payment?!

[Kelby Schimming]

BP,

I have a deal in the works and the seller is willing to finance. However, due to my inexperience, he is requesting a down payment around 300k. I will also need another 200k for closing costs. It is an off market $8mil portfolio. He has agreed to interest only payments for 5 years which would allow for significant cashflow that would be banked to pay off lender asap. I would be able to pay back the loan within 3 years easy.  

Could I get a bank to loan me the 500k? Is this something banks do? 

Or am I best off finding a private lender? If I find a private lender, how could I offer the lender security in their investment? 

Thanks in advance!

[Chris Seveney]

Quote from @Kelby Schimming:

BP,

I have a deal in the works and the seller is willing to finance. However, due to my inexperience, he is requesting a down payment around 300k. I will also need another 200k for closing costs. It is an off market $8mil portfolio. He has agreed to interest only payments for 5 years which would allow for significant cashflow that would be banked to pay off lender asap. I would be able to pay back the loan within 3 years easy.  

Could I get a bank to loan me the 500k? Is this something banks do? 

Or am I best off finding a private lender? If I find a private lender, how could I offer the lender security in their investment? 

Thanks in advance!

Time to play the devils advocate

 So for one of your first deals you want to take down an $8M portfolio with NO MONEY or RESERVES?

You claim you can pay it off in 3 years. Where are your numbers coming from? Did you get T12's from this seller, appraisals, verification of leases, payment histories? What are you considering for capex projects?

To answer your question, you will need a private investor/equity partner on this deal and have to give up some of the equity - but getting something rather than nothing for a "no brainer" deal should not be an issue.