Real Estate Investing Forums

Real Estate Investing => Financing, Hard Money Lenders, Private Money => Topic started by: JeffreyMac on January 03, 2009, 11:39:26 am

Title: Hard Money for Down Payment?
Post by: JeffreyMac on January 03, 2009, 11:39:26 am
Saturday, January 3, 2008


Hello Everyone!


In 2009, my goal is to purchase 2-4 single family residential properties. 

Is it possible and would it make sense to use a hard money lender for the 20% down payment? 

I currently own 0 properties, have a credit score above 720 and I am confident that I'd be able to get a conventional loan for the rest of the purchase price.


Thanks!


Sincerely,


Jeff
Title: Re: Hard Money for Down Payment?
Post by: moellerryan on January 05, 2009, 01:07:44 pm
Your best bet is private money.  There may be hard money lenders out there that will, but they would be in 2nd position and would have to really like the deal.  Do you know anyone that would be interested in a double digit return and would be comfortable with a solid deal?
Title: Re: Hard Money for Down Payment?
Post by: Bryan Silver on January 05, 2009, 04:15:33 pm
Utilize DPA service
Title: Re: Hard Money for Down Payment?
Post by: JeffreyMac on January 05, 2009, 08:20:51 pm
Monday, January 5, 2009


Thank you for the information.


I tried looking up information on DPA services but couldn't find any.  Could you please elaborate?  Thanks again!



Sincerely,


Jeff
Title: Re: Hard Money for Down Payment?
Post by: Mdhaas on January 05, 2009, 09:09:37 pm
just go to Google and type it in.........there are 841,000 references to DPA (Down Payment Assistance)

http://www.google.com/search?hl=en&q=down+payment+assistance&aq=0&oq=down+payment+ (http://www.google.com/search?hl=en&q=down+payment+assistance&aq=0&oq=down+payment+)
Title: Re: Hard Money for Down Payment?
Post by: Investingbygiving on January 06, 2009, 01:31:29 pm
Most banks will not allow the down payment to be borrowed, and not all banks will allow down payment assistance.(I don't know of any)
Down payment assistance needs the seller to agree to give them, the money at closing. Let's say you wanna buy a house listed for $100000 and it appraise for 130,000, so you make a purchase contract for 130,000 hired the down payment assist program and they will give you the $26,000 you need for DP and they will recover it at closing from the seller whom signed an agreement with DPA previous to closing. The numbers need to add up but this is just an example.
Your best bet is private money, find someone with money and partner with them on the deal 70/30 is pretty fair, but if they want more you'll have to decide what to do.
Good luck and be careful.  :biggrin
Title: Re: Hard Money for Down Payment?
Post by: JeffreyMac on January 06, 2009, 11:02:24 pm
Tuesday, January 6, 2009


Thank you all so much for the information!
Title: Re: Hard Money for Down Payment?
Post by: investorman on January 07, 2009, 02:20:18 pm
If you do owner occupied you can get an FHA loan for 3% down for a 2-4 unit
Title: Re: Hard Money for Down Payment?
Post by: honeygee on January 07, 2009, 06:55:57 pm
Are you looking to hold onto the properties or do you want to flip?
Title: Re: Hard Money for Down Payment?
Post by: JeffreyMac on January 11, 2009, 06:44:00 pm
Sunday, January 11, 2009


Currently, my plan is to hold my investment properties for the long term (at least 5 years).   I work in the biotech industry and have steady income coming in, but don't necessarily have the 20% down payment myself for these properties to cashflow.

I believe there may be creative options in acquiring properties with hard money, but not sure if it makes sense...



Jeff
Title: Re: Hard Money for Down Payment?
Post by: moellerryan on January 14, 2009, 06:22:17 pm
There are tons, I repeat tons of deals out there.  And many of the deals cashflow incredibly with 0 down.  If you need to put 20% down for the deal to cashflow then I strongly urge you to look for deals with better cashflow.  I invest in the MidWest and will not touch anything unless there is around 50% equity and the rents are around 2% of purchase.  Basically I get as many deals that fit my criteria coming thru my pipeline as possible and cherry pick the best ones.  I fear you may be taking too much risk.  Here are a few examples of the numbers.  Reply to me directly if you would like to discuss.


Duplex
Value 130K
Purchase 45K
Repairs 15K
Rents 1400
PITI 650

Triplex
Value 140K
Purchase 50K
Repairs 20K
Rents 1800
PITI 750

SFR
Value 115K
Purchase 16K
Repairs 24K
Rents 850
PITI 550

Title: Re: Hard Money for Down Payment?
Post by: curtis on March 06, 2009, 12:56:49 pm
Most banks will not allow the down payment to be borrowed, and not all banks will allow down payment assistance.(I don't know of any)
Down payment assistance needs the seller to agree to give them, the money at closing. Let's say you wanna buy a house listed for $100000 and it appraise for 130,000, so you make a purchase contract for 130,000 hired the down payment assist program and they will give you the $26,000 you need for DP and they will recover it at closing from the seller whom signed an agreement with DPA previous to closing. The numbers need to add up but this is just an example.
Your best bet is private money, find someone with money and partner with them on the deal 70/30 is pretty fair, but if they want more you'll have to decide what to do.
Good luck and be careful.  :biggrin
Does this work for commercial deal?
Title: Re: Hard Money for Down Payment?
Post by: Linley on March 07, 2009, 08:40:31 pm
moellerryan, how do you get these deals with zero down?
Title: Re: Hard Money for Down Payment?
Post by: moellerryan on March 13, 2009, 05:59:55 pm
Linley,

1 hard money lender will do 100% up to 65%LTV.  I won't touch a deal unless it is around 50% LTV, cashflows extremely well and is in a decent area.  This lender will only do 1 deal at a time so I use private money for down payment on the others.  Email me if you have further questions.  Good luck, the next 3 years are going to be incredible!!