Using private money for down payment ?
At this time I’m looking to acquire a large 72 unit deal with OPM for most of the down payment.
Example:
Purchase price $5,000,000
Down pmt: $1,250,000
Amt: 30 year
Interest: 4.5%
Interest only period: 3 years
If the property will bring in an 8% return and I’m going to have $750,000 and the debt partners would finance the remaining $500,000 for the down payment I think this would work.
The debt partner would receive 6% interest for 4 years and then their initial investment would be paid back at year 4.
What are your thoughts ?
Would this strategy work and would it be risky ?