How To Get a Mortgage Under Your Name With Outside Investors

5 Replies

Hi BP Members,

I would like to purchase a multifamily property through a partnership deal with an investor. My investor will put up the capital for the down payment, but I would like to take out the mortgage under my name. I still have Fannie Mae/Freddie Mac slots available (currently only have one personal property under my name), and would like to use one if possible for this purchase.

The only financing option I can think of is to have the investor deposit the down payment into a bank account, let season for 60 days, and then take out the mortgage under my name. 

1. Are there any work arounds to this that other real estate investors have thought of?

2. Is there a way to use commercial loans to get around this?

Thank you!

@Liam Galbraith

That's pretty much the easiest way of doing it.  What is your concern?  Timing?  Otherwise, its not the end of the world to just declare the money and the investor is effectively gifting you the funds for the down payment.

You could/should be able "get around" this with a commercial loan since they don't have to follow the regulations/stipulations of a conforming loan to my understanding.

Good luck.

@David M. Hi David thanks for the help, the timing is one if my concerns however, the gift tax is another major concern. I'm hoping there is a more cost efficient way such as an llc or limited partnership that would let me use my investors funds, but assume the risk of the title to me (in return for my investor putting up the cash).

Do you have any experience or tips when it comes to these areas?  Thank you!

@Account Closed

No, not really. You really should just connect with commercial lenders to see what they will do. Any residential lender, ie originating a conforming residential loan, will definitely have to chase down the source of funds because that's part of regulations. You'll need to see if a commercial lender will be more flexible and care that you take Title personally.

But, still even if you put the funds into a LLC's bank account, a residential lender will still ask. The answer might be a bit easier since its just funds being used to capitalize a new LLC. That might work...

Good luck.