Found a multifamily - Proof of cash to see it

[Scott Rosslow]

I found a multifamily property that I want to buy and hold. The listing agent is requiring that 100% proof of funds for the asking price to show the property. I am partnering with my dad who gave me a bank statement with 50% of the asking price in the bank account. I don't think I can qualify for a loan for the half and I don't want to expose my dad to that much risk as its my first rental property. I would like to see the property to either know if I should adjust my offer or how else I might structure a deal.

We were looking into maybe use creating an LLC together and trying to get a mortgage for the LLC and him maintaining 51% control of it until I was able to cash him out.

Does anyone have any advice?

[Andrew Johnson]

@Scott Rosslow You might be asking two different questions:

1.) How do you get to see the property -> While the listing agent might want 100% proof of funds I'd be surprised if having 50% of the asking price in cash wouldn't get you in the door.  Maybe you need to have your dad ask instead of you.  What does the buyer's agent you're working with think?  Then again the seller may have instructed the listing agent not to show something without proof of funds.  

2.) How do I get the loan for the balance of the money -> That really depends on if it's a under-4 unit property (conventional financing options) or a 5+ commercial property. For the latter your best bet is a local/community/regional bank. The challenge is that your dad may have to come on the loan and they are often full-recourse loan. That's a whole different ballgame as far as risk goes. Even if you establish an LLC the bank may still require a personal guarantee.

Net result: you need to be talking to banks now.  It doesn't do you any good to find a property that you can't qualify for.  And if you only like properties you (and your dad) can't qualify for you have better have a heart-to-heart with your dad about alternative funding strategies.  Buying off on a conventional mortgage vs. a full-recourse loan vs. other strategies can all be very different things (even for a dad).