Creative Financing on a 25 unit

[Kevin Mehner]

Hey all,

I'm looking into buying a 25 unit complex.I currently just own a 4-plex, so I'm new to this size of investing. It is listed for $2,000,000. The long term play is to buy and hold. Obviously because this is bigger than 4 units, a commercial loan is required. Me and my brother would like to partner and purchase this and we potentially have $200,000 combined of our cash to put in toward a down payment which would be anywhere between $400,000 to $600,000 depending on how much the bank makes us put down. We have friends that have money they could put in, but we are looking to do this alone. Obviously we don't have the money to fund the whole down payment on the commercial loan so...

My question is: 

Are there creative ways to fund commercial properties? If margins are good enough is it possible to do hard money on the down payment, then pay that money off within a couple years and then at that point just be on the commercial loan?

Just looking for creative ways to finance this, without taking on other partners... any help would be greatly appreciated! Thanks

[Cody L.]

Few ways (I've done each of these)

Ask the seller to carry 10-15%
Borrow from friends and family to get the extra down. Pay them 8%. They don't have to be "part of the deal" beyond lenders
Use HML for part of the second (it'll be 12%+ points due to a weak second position
Have seller raise price buy $300k if the appraisal will support, and refund that as a credit at close. I've done this and closed with $0 (actually GOT money at closing!)