No Money Down And Cross Collateral Explained - Hard Money Bankers
Cross collateral is a term that some investors may or may not have heard before. Many investors love to take advantage of using cross collateral once they understand it. Cross collateral is when an investor brings in another piece of real estate aside from the primary property in order to make the deal work for the lender. If an investor has a deal that needs $50,000 and $50,000 for acquisition but the lender is only willing to do $60,000 in total, the investor can bridge that gap with other real estate. If the investor puts up an additional piece that is worth $100,000, the lender might feel comfortable with that property adding $65,000 in value to the deal. Now the $60,000 in loan amount is $125,000. Once that happens, the investor went from a deal possibly not working because of too much cash to close to bringing no money to the table. This is one of the current ways to do a 'no money down' deal. No money down really doesn't exist any more in the investor market with any kind of regularity. This is one way to become creative and use free and clear real estate to an investors advantage.
Ian Walsh
215.839.3271
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