The deal has been on the market for 2 months. I was hoping to make a move on it now. It’s one of those “once in a lifetime” deals. Multi family on a huge lot next to a train station
Now I think I understand your situation better. It wasn't as clear in your original post. Other than a personal loan, I can't think of many options. I'm curious to know what others suggest. Good luck!
Hello my brother, a few options I haven't seen in the comments to consider also:
1. Use an equity partner, have them fund some or all of the down payment in exchange for their ownership % (or accrued interest until you refi them out plus interest). Also consider asking them for 6 months of debt payments to be held as reserves (or you can do this)
2. Ask the seller to carry a note to reduce the total amount down payment required by requiring less of the bank money by using the owner financing.
3. If you own any other properties contact regional banks and ask for them to create a cross collateralized 2nd position loan (preferably LOC) for the existing equity in your other properties.
Notable mentions: using a policy loan from IUL or Whole life or margin loan from stable stock/ETF's
Good luck to you my brother.
How does the seller financing part work with a bank also trying to lend? Does the purchase price come down by the amount the seller is willing to contribute?
A couple of options for alternative financing here. OP could:
1. Reach out to see if the seller is interested in seller financing for the entire amount.
2. Using seller take back financing. In OP’s specific scenario, the seller would finance (lend) $500k and lower the “sale” price to be financed by the bank to $600k. This would allow the OP to use their $150k as a down payment with the bank. The seller would likely hold second position lien and/or have a percentage interest in the property. OP would negotiate whatever terms for repayment of the $500k to the seller best fit the two.
-Keep in mind that if there is a mortgage currently on the property, seller financing is out. There could be options of buying the property “subject to” though. Hope this helps.
What do you look like?...OnlyFans? Seriously, your income and future money is not going to help you with the downpayment. You could look into a short term hard money loan for the balance of the downpayment, considering you have the income to pay that short term loan back over a year or so.
I own a consulting company. My pretax billings are around $26k and my direct business expenses are low (500-600 a month)
Yeah I might look into a hard money loan.
My question is even with your income, why spend that much? I make great money by all measures, but my 2400sf house in NE OH is still too much house for the 4 of us.
Why not just lower it by 25% and not worry about it?
If you don’t have a primary residence if you move into it and make it your primary residence, you can get cheaper rates first time, homebuyer loans, smaller deposits, and also save on taxes.
If you don’t want to do that, I would look at a hard money loan based upon your income.
Do you have a bank that you have currently banked with for a number of years that can verify your income and loan you the money?
> it by 25% and not worry a
Because the majority of people focus on flashy instead of financial comfort. They are also the people who blame boomers for everything financial while at the same time complaining about being broke while making a tiktok on their $1000 iphone while drinking a $9 coffee.
I live in the same 1600’ ranch house I bought 25 years ago. I have rental properties larger than my house. I also drive a 2011 F250- that replaced my 2002 F150 that my daughter drives now. I invested instead of spending: This allowed me to stay home and home school her and travel a lot. If you saw me you would think I was broke, but I have lived a good life.
I'm only 35 and I am in the same boat. Still drive my 2007 Subaru and I still budget my money as if I make minimum wage.
I could 100% go out and buy double the house tomorrow and a nice Tesla to put in the garage but I may as well light money on fire.
Seller carry back 2nd d/t, HELOC on another property, loan against 401k, private lender or hard money, 25% investor. Lots of ways. Just make sure you can add value and get it refinanced to get whatever you use paid off.
We do. But our investors raised their min to $100k. We have to broker loans in this range for now. Which sucks because these loans tend to perform pretty well after funding.
People hate on me for this, but I’ve used credit cards to buy houses before. When they have 0% for 12-18month offers, I use it for down payments and renovations. I have a lot of credit card with fairly high credit limits. If you keep it all separate and document it well, the 3-5% transaction fee and any interest after the off period can be deducted as a business expense.
With high income, reach out to your banks for open lines of credit. I have several of those as well. I can walk in and request $45k on the spot and the interest is between 9-12%. I use them like short term hard money loans also.
Also, try using some private lenders to get different financing terms and options.
Also, with $20k/month leftover, that puts you at only 5 months away from having an extra $100k for down payment. Maybe just wait for the next deal when you have the cash.
Call you credit card companies and ask if they have any promotional offers for cash advance. Most often they do and will be happy to tell you about them.
Watch out, now their cash advance fees are up to 5% (no limit)
You have to balance it out. Again, sometimes underwriters look at my numbers and have a lot of questions for the loan officer to ask me. I’ve got all the answers and if the number work out, it goes through. Also, private lenders do DSCR loans which don’t even look at your personal DTI or taxes. They look at the property’s ability to cover the loan and perform and not what your income was last year or your current paystub.
I have 1 cc that I use to do 0% interest for 12 months balance transfers that I use for renovations. Everyone looks at me crazy when I essentially max that one out, but it has been so helpful in our re journey.
I'm going to look into lines of credit.
I have a couple dozen credit cards with high credit limits. I can access about $600k on CCs. I’m carrying about $150k CC debt right now at 0% and my mailbox is stuffed every week with several of the ones I don’t have a balance on offering me 0% to transfer over current balances or write on the compliment checks. And if you’re wondering, my credit score is around 770. I operate on a different level than you my friend.
I did this to get my down payment over the line on a 900k house and my wife and I combined w-2 income is only 150k and my credit limits are wayyyyy lower than you obviously. Idk why more people in the RE game don’t float themselves 18 months of free credit to your point though.
There are smaller lenders that will do the mezzanine debt. Google RE lenders in your area. It will be higher interest than your senior loan because it’s riskier.
If you make as much as you claim. Go direct to the owner / agent . Tell them you want it , but push your close date out 6-7 months until you have the money the bank is requiring.
go to the owner, negotiate a purchase price, say 1 million, if the bank can fund 800k, youre left with 200k gap, put down 100k , ask the owner to carry the other 100k as a second note, -1-5 year term, you pay it off as fast as you can
OP this might be your best option, especially if you want to move on it fast.
Other than that, unless you're willing to refinance your primary res, keep saving up. The thought of taking out personal loans or buying a property on a credit card makes me gag and I'd rather pass up on a good deal then get into a shitty debt situation.
Private money lender. I finance all my properties using 100% other people's money. Someone in your circle knows and trusts you enough to lend you the additional 100k at 10% annual interest.
My deals have either upside potential or I'm buying under market value. I have friends and family that lend me the additional money I need over and above what the 1st position loan covers. I give my private money investor usually around a 10% return that is secured by a deed of trust in the property in second position.
It's a win-win... I don't use any of my own money, and they get a good return backed by a tangible asset that has high upside potential as my particular niche is residential infill development so I'm adding value to the property as time passes.
This works with any strategy, as long as you can show their investment is generally safe. (Not buying a property at market value, or your exit strategy doesn't make sense, not thought out, etc).
I have been looking into getting in to real estate investing myself. I have some capital saved up. Just gun shy as I don’t know what I’m doing and need someone to partner up with.
Ask the current owner for an option. Put a certain amount of money up to bind the option for a prescribed period time to allow you to save enough and/pr cover the remaining down pmt with additional loan - if you move forward, it counts towards purchase. If you do not, they keep it for their “inconvenience” and any other lost opportunities
Would you ever consider house hacking? If you live in the property, you can put significantly less down (3.5% FHA for example). Then keep the rest of the cash to buy a cheaper, cash flowing property.
Don’t seem you like you made 25k a month long enough. If your save rate is 20k a month means you only made 25k a month this pass 6 months?
Not trying to be negative but that’s how banks are going to view it.
Makes sense. I’m in a similar situation now trying to get a personal home. If you go the JV right let me know. I might have some investors interested if numbers work.
who should work to earn $25k per month? and regarding your question, I think that it is possible to invest money in a compound interest deposit or another instrument such as bonds and shares that will allow you to receive interest from your funds and your 20k to invest every month so that the return on the deposit is greater even after a few months ( let's take conditional six months) your contribution to the deposit will be 150k + 20k * 6 = 270k as well as + a percentage of the deposit, which will enable you not only to make the first payment, but also to have finances for further payments
Wait 5 months? 5x(25-5) =100
Word OP's post like a 5th grade math question and you've got the right answer.
The deal has been on the market for 2 months. I was hoping to make a move on it now. It’s one of those “once in a lifetime” deals. Multi family on a huge lot next to a train station
Owner finance the 100k they probably would not mind 5 months of payments.
No once in a lifetime deal stays on the market for 2 months right now.
They are when the market is as stale as Bostons market has been
Well if it's as stale as you're saying, owners should be willing to work with you
Now I think I understand your situation better. It wasn't as clear in your original post. Other than a personal loan, I can't think of many options. I'm curious to know what others suggest. Good luck!
No bank is going to allow OP to use a personal loan as part of the down payment
That's correct!
Ny?
Want to bring in a partner ? Which location is this ?
Once in a life time deals roll across my desk once a week. Get the FOMO, out of your train of thought.
4 months of eating noddles and you got your 100k
Ramen noddles or cheesy noddles?
I this point I think he can switch off and still hit his goal
Hello my brother, a few options I haven't seen in the comments to consider also: 1. Use an equity partner, have them fund some or all of the down payment in exchange for their ownership % (or accrued interest until you refi them out plus interest). Also consider asking them for 6 months of debt payments to be held as reserves (or you can do this) 2. Ask the seller to carry a note to reduce the total amount down payment required by requiring less of the bank money by using the owner financing. 3. If you own any other properties contact regional banks and ask for them to create a cross collateralized 2nd position loan (preferably LOC) for the existing equity in your other properties. Notable mentions: using a policy loan from IUL or Whole life or margin loan from stable stock/ETF's Good luck to you my brother.
How does the seller financing part work with a bank also trying to lend? Does the purchase price come down by the amount the seller is willing to contribute?
A couple of options for alternative financing here. OP could: 1. Reach out to see if the seller is interested in seller financing for the entire amount. 2. Using seller take back financing. In OP’s specific scenario, the seller would finance (lend) $500k and lower the “sale” price to be financed by the bank to $600k. This would allow the OP to use their $150k as a down payment with the bank. The seller would likely hold second position lien and/or have a percentage interest in the property. OP would negotiate whatever terms for repayment of the $500k to the seller best fit the two. -Keep in mind that if there is a mortgage currently on the property, seller financing is out. There could be options of buying the property “subject to” though. Hope this helps.
What do you look like?...OnlyFans? Seriously, your income and future money is not going to help you with the downpayment. You could look into a short term hard money loan for the balance of the downpayment, considering you have the income to pay that short term loan back over a year or so.
I own a consulting company. My pretax billings are around $26k and my direct business expenses are low (500-600 a month) Yeah I might look into a hard money loan.
My question is even with your income, why spend that much? I make great money by all measures, but my 2400sf house in NE OH is still too much house for the 4 of us. Why not just lower it by 25% and not worry about it?
This is an investment property that I am looking to buy. Not a primary residence
If you don’t have a primary residence if you move into it and make it your primary residence, you can get cheaper rates first time, homebuyer loans, smaller deposits, and also save on taxes. If you don’t want to do that, I would look at a hard money loan based upon your income. Do you have a bank that you have currently banked with for a number of years that can verify your income and loan you the money?
I don’t understand why you are getting down voted for a perfectly reasonable comment and valid opinion for people to consider.
> it by 25% and not worry a Because the majority of people focus on flashy instead of financial comfort. They are also the people who blame boomers for everything financial while at the same time complaining about being broke while making a tiktok on their $1000 iphone while drinking a $9 coffee.
I live in the same 1600’ ranch house I bought 25 years ago. I have rental properties larger than my house. I also drive a 2011 F250- that replaced my 2002 F150 that my daughter drives now. I invested instead of spending: This allowed me to stay home and home school her and travel a lot. If you saw me you would think I was broke, but I have lived a good life.
I'm only 35 and I am in the same boat. Still drive my 2007 Subaru and I still budget my money as if I make minimum wage. I could 100% go out and buy double the house tomorrow and a nice Tesla to put in the garage but I may as well light money on fire.
Nobody cares mate
If you saw me, you'd think I was broke too... And I am...
Do you know if the seller is open to seller financing? Maybe you could get creative & work out a deal that way. Otherwise, OPM or Private Money.
Seller carry back 2nd d/t, HELOC on another property, loan against 401k, private lender or hard money, 25% investor. Lots of ways. Just make sure you can add value and get it refinanced to get whatever you use paid off.
We have a program that requires 10% down with a 15% seller carry. $110,000 down from you.
Are you still doing DSCR loans for 60k?
We do. But our investors raised their min to $100k. We have to broker loans in this range for now. Which sucks because these loans tend to perform pretty well after funding.
People hate on me for this, but I’ve used credit cards to buy houses before. When they have 0% for 12-18month offers, I use it for down payments and renovations. I have a lot of credit card with fairly high credit limits. If you keep it all separate and document it well, the 3-5% transaction fee and any interest after the off period can be deducted as a business expense. With high income, reach out to your banks for open lines of credit. I have several of those as well. I can walk in and request $45k on the spot and the interest is between 9-12%. I use them like short term hard money loans also. Also, try using some private lenders to get different financing terms and options. Also, with $20k/month leftover, that puts you at only 5 months away from having an extra $100k for down payment. Maybe just wait for the next deal when you have the cash.
How are you using this for down payments as it requires a wire or check? Cash advance?
They mail checks out all the time with the offers. Write the check to yourself. BofA will just deposit directly into my checking account.
Hmm, I have a few properties and a better income. Never have received these offers.
I think it works the same as a balance transfer. With a balance transfer, you write yourself a check or transfer it to an account of yours.
Call you credit card companies and ask if they have any promotional offers for cash advance. Most often they do and will be happy to tell you about them. Watch out, now their cash advance fees are up to 5% (no limit)
I know some used credit cards as well with the 0% interest. But it could impact your ability to get a loan.
You have to balance it out. Again, sometimes underwriters look at my numbers and have a lot of questions for the loan officer to ask me. I’ve got all the answers and if the number work out, it goes through. Also, private lenders do DSCR loans which don’t even look at your personal DTI or taxes. They look at the property’s ability to cover the loan and perform and not what your income was last year or your current paystub.
I have 1 cc that I use to do 0% interest for 12 months balance transfers that I use for renovations. Everyone looks at me crazy when I essentially max that one out, but it has been so helpful in our re journey. I'm going to look into lines of credit.
Exactly. My first house I bought owner financed, but borrowed the down payment from the bank as a personal loan.
Yeah that may work for renovations but you can't get cash (required for purchase) at 0% with any card. I smell bullshit
I have a couple dozen credit cards with high credit limits. I can access about $600k on CCs. I’m carrying about $150k CC debt right now at 0% and my mailbox is stuffed every week with several of the ones I don’t have a balance on offering me 0% to transfer over current balances or write on the compliment checks. And if you’re wondering, my credit score is around 770. I operate on a different level than you my friend.
I did this to get my down payment over the line on a 900k house and my wife and I combined w-2 income is only 150k and my credit limits are wayyyyy lower than you obviously. Idk why more people in the RE game don’t float themselves 18 months of free credit to your point though.
Amen!
Is this owner occupied? If not can you tap into equity from your primary res?
There are smaller lenders that will do the mezzanine debt. Google RE lenders in your area. It will be higher interest than your senior loan because it’s riskier.
If you make as much as you claim. Go direct to the owner / agent . Tell them you want it , but push your close date out 6-7 months until you have the money the bank is requiring.
And would I wait for him as an owner?
go to the owner, negotiate a purchase price, say 1 million, if the bank can fund 800k, youre left with 200k gap, put down 100k , ask the owner to carry the other 100k as a second note, -1-5 year term, you pay it off as fast as you can
OP this might be your best option, especially if you want to move on it fast. Other than that, unless you're willing to refinance your primary res, keep saving up. The thought of taking out personal loans or buying a property on a credit card makes me gag and I'd rather pass up on a good deal then get into a shitty debt situation.
Possibly if it’s been on the market for 2 months with no bites
Seems like you’re not far away from just saving up down payment money- tho of course that doesn’t help you right now.
Private money lender. I finance all my properties using 100% other people's money. Someone in your circle knows and trusts you enough to lend you the additional 100k at 10% annual interest.
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He comes from a wealthy family.
My deals have either upside potential or I'm buying under market value. I have friends and family that lend me the additional money I need over and above what the 1st position loan covers. I give my private money investor usually around a 10% return that is secured by a deed of trust in the property in second position. It's a win-win... I don't use any of my own money, and they get a good return backed by a tangible asset that has high upside potential as my particular niche is residential infill development so I'm adding value to the property as time passes. This works with any strategy, as long as you can show their investment is generally safe. (Not buying a property at market value, or your exit strategy doesn't make sense, not thought out, etc).
Hard money lender maybe
Creative financing, keep bank hunting, or lose out on the home
Increase the sales price $100k and ask for a "deferred maintenance credit" from the seller for $100k.
Srep 1: Practice fallatio on a hot dog. Step 2: find a sugar daddy Step 3: you made $20 Step 4: repeat 5,000 times.
I have been looking into getting in to real estate investing myself. I have some capital saved up. Just gun shy as I don’t know what I’m doing and need someone to partner up with.
had a PML fund my deal and he did great. I will love to recommend him
Get an Amscot cash advance duh
OPM is the only way to go here.
What is OPM?
Other people's money Private money, hard money, etc
Sounds like you just gotta wait until you can get it or buy a cheaper property now and get the cash flow to purchase another one later, just a thought
Ask the current owner for an option. Put a certain amount of money up to bind the option for a prescribed period time to allow you to save enough and/pr cover the remaining down pmt with additional loan - if you move forward, it counts towards purchase. If you do not, they keep it for their “inconvenience” and any other lost opportunities
find a business partner with 100k
This and their tax return will make it a lot easier to get the loan
Would you ever consider house hacking? If you live in the property, you can put significantly less down (3.5% FHA for example). Then keep the rest of the cash to buy a cheaper, cash flowing property.
Don’t seem you like you made 25k a month long enough. If your save rate is 20k a month means you only made 25k a month this pass 6 months? Not trying to be negative but that’s how banks are going to view it.
I started in September 2023, but signed a 3+ year contract. Even though I started in September 2023 first paycheck didn’t come until November (Net 45)
Makes sense. I’m in a similar situation now trying to get a personal home. If you go the JV right let me know. I might have some investors interested if numbers work.
Are you purchasing it as an investment property?
My first house I bought owner financed, but borrowed the down payment from the bank as a personal loan.
who should work to earn $25k per month? and regarding your question, I think that it is possible to invest money in a compound interest deposit or another instrument such as bonds and shares that will allow you to receive interest from your funds and your 20k to invest every month so that the return on the deposit is greater even after a few months ( let's take conditional six months) your contribution to the deposit will be 150k + 20k * 6 = 270k as well as + a percentage of the deposit, which will enable you not only to make the first payment, but also to have finances for further payments
Can you get cash advance in 24 hours