I've recently hear of a well respected man from greater Boston area who gets private money as the DOWN PAYMENT for a property he really likes , and have the bank - loan the rest.
stating, that is how he finances 100% of deals.
what is the public opinion here......
can anyone shed some light...
Sure, its called 'gap funding' and some private money lenders will do it. They fund the down payment on the bank loan, or the gap between the loan and the purchase price.
Also, I assume unless ALL that "private money" is gifted (which it probably isn't)... that there's surely a higher interest rate to be paid on the borrowed funds for the down payment.
Is he doing this for buy and holds? Is he placing the private lender in second position or is he giving them an equity position in the properties? I think for the private lender with proper due diligence on the project and the person doing the deals they can mitigate their risks. I don't see a problem for the man setting up the deals this way as long as the deal is structured to be successful, just is more challenging when you are financing 100% of the deal.
"Our success begins with our thoughts of creating a successful life, our mindset and our belief in our own success is the most powerful tool we have"....Howie Baker, D.V.M.
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