AWESOME Deal but little funds...What would you do?

[Tiffany S.]

I know someone trying to off load some properties. They were inherited by the family and I guess they cannot agree on the day to day operations of being a landlord...so they want to sell. I do not have specifics but most of them are already rented and its a mix of SFH and MFH. I'm waiting for more information myself but my question is how would one go about getting a loan for these properties? I certainly do not have the funds for a 20-25% down payment for one mortgage let alone 11. Any creative financing advice? I think they just want to be done with the properties so i dont think owner fianance, subject-to, etc will work.

[Nick C.]

You might have to give up equity to a money partner. I'm assuming they'll want 50%, which is a lot to give up, but it's better than 100% of nothing. 

Or you could try to find a hard money lender that will lend 100%. This may be difficult if you have no experience but it's worth a shot. When you get the properties cash flowing you can refinance out of the hard money using a traditional lender to get a lower interest rate.

[John Thedford]

Take on a partner. 0% of whatever is still -0-. 15% of 1M is 150K.

[Sean Carroll]

@Tiffany S.seller finance would be the best bet, maybe see if they will do it with a low-interest rate. this may intrigue them more. Study the tax benefits and show them what they would make over the term of the loan. 

[Chris Grenzig]

@Tiffany S. Two routes I see you going. 

1. Wholesale it for a finder's fee to someone that has the money.

2. Find a Joint Venture partner and negotiate an equity stake where you put up some money (or none if they're cool with that), time and finding the deal in balance with the capital and/or time and expertise they have. We have people come to us with JV opportunities all the time and we'll gladly do it because while we bring a lot of the money and expertise, we spent 0 time finding the deal, just making sure it works.

Hope that helps!

[Stephanie P.]

@Tiffany S.

Did you find financing yet?

Stephanie

[Oscar Pinto]

1. Seller financing would be a good choice. For instance, try to get a loan and see how much you actually have to come up with. THEN calculate how long it may take to improve the units to increase value, thereby allowing you to borrow more. Ask for a 0 down / paid in 1 or 2 years scenario. That'll give you time to get your financing in order. 

2. Lease w/option to buy. Similar to 1. Lease it for a year, pay them their rent, manage the property and improve income and lower expenses. This will improve property value and may help you get financing on your own in a year or so. 

3. Find out how much needed to get a loan, like you said 30 percent. Create a presentation showing who ever invests the 30 percent with you will earn money. Benefits are cash flow, equity, appreciation, etc. You get the 70 from the bank and they bring in the 30 and they will own 30 percent equity. No need to give them any more than that. They are plenty of people that would like to invest in real estate but don't have the time and would be happy with a modest return. 

[John Cushing]

Chris Grenzig are you still flipping houses on the island?

[Chris Grenzig]

John Cushing still keep my eye open for a possibility to do a flip, but currently focusing almost entirely on multifamily in the southeast and Midwest. That being said we're always trying to find ways to do deals on Long Island because it'd be great to do some stuff in our backyard.

[David Dachtera]

@Tiffany S.,

Who do you know who may be looking for a better return on their retirement investments with less risk and volatility?

That's one way to find private lenders. Warm market is good, but networking and meeting new people always helps.

You can get short-term (5 years or so) money to acquire the properties, then refinance them to repay your private lenders.

Just a thought ...

[Rosemarie Douglas]

What is the best way to seek private leaders?