How would you fund this deal?

[David D'Louhy]

Time to get your creative juices flowing...

I have an option to purchase a home in a nice neighborhood and have been looking for a lease-purchase tenant/buyer. I found one that I like that makes sense for cash flow, but I don't have the money to buy the house myself and the seller has already told me that they aren't interested in doing seller financing. I don't have the down payment to buy it. How would you fund this deal? 

25% down payment is $36,250.

With a 30yr mortgage at 6%, the monthly cash flow after PITI would be $660. (the yearly ROI from the cash flow is 21.8%)

Tenant/Buyer would be paying $7,000 non-refundable option deposit down to move into property and there would be a $40,000+ spread of equity between my purchase price and my sell price to the buyer. 

Tenant/Buyer is responsible for maintenance and repairs.  

Any ideas to make it happen? I'd rather make money on some of the deal than none of it. 

I've thought of the following options:

1) Find someone who will loan the down payment and I pay them interest. (use my credit to get a mortgage)

2) Get a partner who will put up down payment money. (use my credit)

3) Get a partner who can use their money and credit to buy the house with a mortgage.

4) Assign my contract to another investor who wants cash flow for some of the down payment.

5) Find someone who will loan the whole amount (or almost all of the purchase) and we either partner or I just pay them interest. 

Any other ideas? Or suggestions?

Thanks in advance!

[Steve Vaughan]

@David D'Louhy - how long is your option to buy from the seller?

Most likely an assignment of lease option (LOA) to your tenant buyer could make sense.  Sounds like a lot of work (and potential financial trouble) for you to purchase it.

If there is more than 12 months left on the option, try assigning it.  I usually pay 1% consideration to the homeowner, then assign for 3%.  I get no monthly because I don't want the risk of the TB damaging things or not paying (as in a sandwich or SLO), but I get a spread on the back end.  Sounds like good equity there.  Nice find!  

@Brian Gibbons may have time to offer a nugget or 2!