How Are You Guys Financing Your Deals?

Question

Hi,

I found a great off-market multifamily deal but need help coming up with the down payment. A HELOC isn't an option, and a cash-out refinance doesn't make financial sense. I really don't want to lose this deal. Any suggestions or financing options I should look into?

Vijay Friedman · Answer

@Amy MitchellIf it's a strong off-market deal, I'd also explore options beyond a HELOC or cash-out refinance. Depending on the numbers, seller financing, bringing in an equity partner, or short-term bridge financing could help you get across the finish line without losing the opportunity. The right option usually depends on the property's cash flow and your exit plan.

G. Brian Davis · Answer

Hi @Amy Mitchell, it sounds like a great off market find. Since a HELOC and refinance are off the table, I'd suggest looking at a private money partner or a joint venture where you bring the deal and the equity while they bring the down payment. I've seen many investors scale this way when they have the deal flow but not the capital. I used to manage a large portfolio of rentals and eventually moved to only investing passively through our co investing club where we pool capital with $5K minimums. If the deal is as strong as it sounds, a savvy investor would likely be happy to partner for a share of the equity and cash flow.

Mohammed Rahman · Answer

Hey Amy,

Depending on the numbers, you could look into bringing on an equity partner, raising capital from friends or family, or working with a private lender. Some investors also negotiate seller financing or a seller carry for part of the purchase price, especially on off-market deals. If the property has significant value-add potential, bridge financing may also be worth exploring.

That said, I'd be careful not to force a deal just because it feels like a great opportunity. If you have to stretch too far or piece together financing that leaves you overleveraged, it may not be the right deal. There will always be another opportunity.

Feel free to reach out an connect with me if you have any more questions - my DMs are always open!

Shiloh Lundahl · Answer

I agree with@Vijay Friedman. Look at deal structure, look at cash flow, and then consider bringing in an equity partner. But one thing I wouldn't encourage you to do is to figure out a way to get into the deal where you don't have enough reserves to stabilize the deal. That's worse than letting the deal go.

Here's an analogy, imagine you're stranded on a deserted island, and you find a row boat on the island and you decide to row out to sea to find a passing ship to rescue you. When you move the boat to the ocean to start rowing yourself out to sea, you notice that there is a big pile of treasure underneath the row boat. you decide that you want to bring some of the treasure with you. As you're looking at the treasure, you notice,there's a lot of really awesome things in the treasure and you want to bring it all with you. However, the more you load up your boat, the lower your boat sits in the water. At some point, one more armful of treasure lowers the boat to the point where water starts to come in over the sides. You need to make a decision how much treasure are you going to try to bring with you on this boat.

Be careful to be wise and not greedy. those that are greedy sink. But those that don't bring any treasure with them, I would say are unwise. Make sure that the situation you get yourself into that you are likely able to sustain it. Because it's better to live to your next deal then to lose everything because of a deal you didn't want to let go.

Nadean Willis · Answer

I have a private lender that may take it and truly will lend up to 100%.  However, they have strict rules about location.  If this is in a smaller city or rural they won't touch it.  They will however, bring all the funds but it will be as a JV with you.  Happy to help look at the numbers and let you know what your options are.

Simmy Ahluwalia · Answer

Our Unsecured Line of Credit runs from $30k to $300k, depending upon where you qualify.  MUST have strong credit, low DTI and a clean credit record.

Bill DiFilippis · Answer

You'd need to find a JV partner - I don't see any legit financing options without cash in hand for DP.

Erik Estrada · Answer

This is why you have the person sign an NDA before you present the deal to them. And not every JV partner is looking to be part of the deal either. They are pretty much a hard money lender with much more upside. You are ultimately the one that will be doing all the work.

How Are You Guys Financing Your Deals?

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