All Forum Posts by: David Garcia

Mortgage Lender here: it's fine if the down payment for the new property is from a HELOC/HE Loan. There is no requirement that the funds need to be seasoned. Down payment funds just can't be from a unsecured loan (personal loan/credit card). Any secured loan is fine as long as we have the documentation. I'm happy to answer any other questions on that you might have.

@David Garcia

You'll get denied for both your HELOC and your loan on the MF if you use those terms. HELOC bank doesn't want their line used as a term loan on real estate they don't have collateralized and the bank that you apply for a loan for doesn't want your down payment to be borrowed.

If you wanted to get the HELOC for home improvements then decide to draw on it for liquidity, had it sit in a bank account for a couple months and then applied for a MF loan and used it as the down payment, you'd have to answer no to the question, "is any part of the down payment borrowed". But if that answer was no, then you wouldn't get denied for the reasons mentioned previously.

That being said, try elements.org/spedersen. You can tell Shaneka I sent you and ask her real questions. She's a great resource to get some information on getting a HELOC.

My money guy paid everything at the end of each week, kinda like a Cost Plus deal. I charged a minimal fee like $1000 week for my time. Then at the end, we split everything 50/50.

But.......I was a really experienced, really high end GC, with my own crews and subs that I provided. That's what made it worth 50/50 to him. If you're not able to be/do that, then I would think the split would be more like 60/40,  65/35, 70/30....

When I have done it, I was the GC and my partner was the money guy. I handled EVERYTHING except the money and we split the money 50/50.

YOur deal sounds different so see what others say about how to split.....

Pretty much everything is negotiable withing the boundaries of the law.

You talk about your partner, which usually implies they have put up equity, but then mention paying them back for funds borrowed which implies they are a lender.  Of course, they could do both.  Those two activities are quite different so each would need to be discussed and clarified.

 Yes, or an S Corp. Ask to see which one is more appropriate for your venture.

You'll need to get a legal entity for your partnership first. This should spell out each partner's responsibilities. Who is the manager? Who does the work? Who puts in how much money? What is the split on profits (and expenses)?

Pretty much everything is negotiable withing the boundaries of the law.

You talk about your partner, which usually implies they have put up equity, but then mention paying them back for funds borrowed which implies they are a lender.  Of course, they could do both.  Those two activities are quite different so each would need to be discussed and clarified.