Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Creative Real Estate Financing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 1 year ago on . Most recent reply

User Stats

31
Posts
11
Votes
Kelby Schimming
  • Investor
  • Houston, TX
11
Votes |
31
Posts

Bank Loan for a Down Payment?!

Kelby Schimming
  • Investor
  • Houston, TX
Posted

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!

Most Popular Reply

User Stats

17,994
Posts
15,467
Votes
Chris Seveney
  • Investor
  • Virginia
15,467
Votes |
17,994
Posts
Chris Seveney
  • Investor
  • Virginia
ModeratorReplied
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. 

  • Chris Seveney
business profile image
7e investments
5.0 stars
16 Reviews

Loading replies...