I Just put in my first 3 offers out of state. I have a down payment question.

12 Replies

Hello everyone.

So this is whats happening, I have been looking into investing in AZ and I just put in three offers on three different properties, all 4plex and will the loan I got a will be making an income monthly from them...

 Im a little bit worried because I don't want to be house poor if any of  my offers are accepted.

My questions to you is, how can I get my down payment with out using my own money on top of the mortgage I'm already approved for? 

I was thinking of taking a 2nd loan just for the down payment, but the banks don't want to do that for me.. Any ideas? I would like to buy all 3 of the properties if I can find a good way to get more for my down payment..  any thoughts? I know there is a way to do this and I will find it! 

Also, any thoughts on AZ and the rental markets?

THANK YOU!!!! 

Paul Samia

Have you tried a heloc on your personal residence? Do you have a 401K you can borrow from? 

@Paul Samia 

If you do decide to borrow from a 401k plan, the following IRS website explains the rules.

http://www.irs.gov/Retirement-Plans/Retirement-Pla...

Paul, make sure you do not over leverage yourself. You also need to have personal reserves for each property in case of vacancies and maintenance. And with 12-units, you will have maintenance. If you are using conventional financing, there is no way to get around putting less than 25% down. You would want to look at some creative financing. Can the seller carry back a 2nd? 

I don't mean to sound arrogant, but why didn't you figure out the down payment before you submitted offers? 

Originally posted by @Aristotle Kumpis

I don't mean to sound arrogant, but why didn't you figure out the down payment before you submitted offers? 

Hahah! Of corse I have the down payment in the bank, my question was how do I use the banks or a lenders money for the down payment so I don't have to use my money otherwise I'll be broke but ill own a plex.

Originally posted by @Rob Beland :

Have you tried a heloc on your personal residence? Do you have a 401K you can borrow from? 

 No, I don't have a 401k :( I know I had one in 2003 with a company that is not closed. Do you know how I can find out if I still have, it and what's it's worth today? 

Originally posted by @Paul Samia:
Originally posted by @Rob Beland:

Have you tried a heloc on your personal residence? Do you have a 401K you can borrow from? 

 No, I don't have a 401k :( I know I had one in 2003 with a company that is not closed. Do you know how I can find out if I still have, it and what's it's worth today? 

Now closed* sorry

Try looking up a FHA Rehab loan if they(the properties)/you qualify, I thnk 201k-

Consultant K vs. Streamline K loans.

Originally posted by @Paul Samia :
Originally posted by @Aristotle Kumpis: 

I don't mean to sound arrogant, but why didn't you figure out the down payment before you submitted offers? 

Hahah! Of corse I have the down payment in the bank, my question was how do I use the banks or a lenders money for the down payment so I don't have to use my money otherwise I'll be broke but ill own a plex.

Well, you are using 75% of the banks   money. The only way I know to end up with little down, is to find a private party that is willing to take out a 2nd when you close on the 1st. But you have to have equity of course. And then your cash flow would be pretty much $0. Take your pick: Either pay upfront now and get cash flow. Or try to leverage up to 100% and get no cash flow. 

Were the offers in writing?

Did you place the offers through a realtor?

Did the realtor ask for proof of funds?

Are you actually planning on only closing on on property?

Do you have financing?

I wish you well, but IMHO you need to acquire more knowledge about real estate before trying to acquiring real estate.

Originally posted by @Bob B. :

Were the offers in writing?

Did you place the offers through a realtor?

Did the realtor ask for proof of funds?

Are you actually planning on only closing on on property?

Do you have financing?

I wish you well, but IMHO you need to acquire more knowledge about real estate before trying to acquiring real estate.

Yea they were in writing.

Yes I placed them through a realtor

I don't understand this question but I'm planing on closing 1 of the 3 

Yes I'm approved for $500k 

I know a lot about real estate, I'm a real estate agent :) I have been studying inventing for a few years now and I'm ready to start buying.. I'm just trying to find more "out of the box" approach. 

But if I want to, I can pull $53k for a down payment from my accounts but I don't want to use my money.. I will have to find another lender just for the down. 

On any of the 3 deals I will be making a $1,475/mo cash flow that's after everything property tax,  mortgage, insurance, and property management seeing how I live out in ca and the properties or in AZ. so I was thinking what's another $175/mo for the $53k I need down... All the numbers still add up. And I will still come out in the positive cash flow. 

What do you think? 

Originally posted by @Aristotle Kumpis :
Originally posted by @Paul Samia:
Originally posted by @Aristotle Kumpis: 

I don't mean to sound arrogant, but why didn't you figure out the down payment before you submitted offers? 

Hahah! Of corse I have the down payment in the bank, my question was how do I use the banks or a lenders money for the down payment so I don't have to use my money otherwise I'll be broke but ill own a plex.

Well, you are using 75% of the banks   money. The only way I know to end up with little down, is to find a private party that is willing to take out a 2nd when you close on the 1st. But you have to have equity of course. And then your cash flow would be pretty much $0. Take your pick: Either pay upfront now and get cash flow. Or try to leverage up to 100% and get no cash flow. 

 See my reply to bob below. 

@Paul Samia   If I remember correctly .... isn't there  a book written on this problem by @Brandon Turner ... maybe he can help. :)

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