Turnkey or cashflow producing property with HML

8 Replies

I'm looking to start investing in real estate using creative financing. Read a couple books on the topic and have been trying to think of various ways to get going.

Is it possible to get a hard money loan to purchase a turnkey or any current cashflow producing property? Especially a multifamily where I can live in one unit and rent the other(s).

I'm currently looking to purchase a multifamily home in the DFW area where I can live in one unit and rent the rest.

Thank you all in advance.

@Jimmond Thomas , why do you want to get a HML for a turnkey property? Usually that would only be used as a bridge loan when you're fixing up the property yourself.

If you don't have the income/credit for a conventional loan, you can find other alternative lending for a turnkey property. You'll still have to put at least 20% down, and you'll be paying at least 7% in interest. However, since you mentioned creative financing, you might not have the 20%. In that case, you're most likely going to have to move away from turnkey. Look into the BRRR strategy, and you can get seller financing or a HML as your bridge financing.

@Sam Grooms, thanks for the feedback. My rationale was that if I didn't have the credit/capital for a conventional loan, I could purchase a property that's income producing and would be able to pay back the HML then refinance later. I will consider the BRRR strategy. Thanks again.

Originally posted by @Jimmond Thomas :

I'm looking to start investing in real estate using creative financing. Read a couple books on the topic and have been trying to think of various ways to get going.

Is it possible to get a hard money loan to purchase a turnkey or any current cashflow producing property? Especially a multifamily where I can live in one unit and rent the other(s).

I'm currently looking to purchase a multifamily home in the DFW area where I can live in one unit and rent the rest.

Thank you all in advance.

Jimmond,

Welcome to the site.  I think the most appropriate way for you to get started is to promote to duplex and triplex owners in the DFW metroplex, either through direct mailing the property owners or through bandit signs placed in the areas where those properties are located.  When you get response to your advertising, you are looking for someone who is willing to owner-finance or allow you to take a property subject to its existing financing.

You definitely don't want to go through traditional forms of borrowing (FHA, non-conforming loan or a hard money loan). Those kinds of loans exist in the marketplace for a reason and none of them really helps you get where you are trying to go. It may take a while and you will have to exercise patience, but I would look to get the word out to as many landlords as possible that own the properties you are looking to start with and find one that is willing to hold the loan for you. It will not be easy, but purchasing property subject-to an existing loan or getting an owner to finance a deal happens every single day. You can do it ~

Best of luck.

Originally posted by @Chris Clothier :
Originally posted by @Jimmond Thomas:

I'm looking to start investing in real estate using creative financing. Read a couple books on the topic and have been trying to think of various ways to get going.

Is it possible to get a hard money loan to purchase a turnkey or any current cashflow producing property? Especially a multifamily where I can live in one unit and rent the other(s).

I'm currently looking to purchase a multifamily home in the DFW area where I can live in one unit and rent the rest.

Thank you all in advance.

Jimmond,

Welcome to the site.  I think the most appropriate way for you to get started is to promote to duplex and triplex owners in the DFW metroplex, either through direct mailing the property owners or through bandit signs placed in the areas where those properties are located.  When you get response to your advertising, you are looking for someone who is willing to owner-finance or allow you to take a property subject to its existing financing.

You definitely don't want to go through traditional forms of borrowing (FHA, non-conforming loan or a hard money loan). Those kinds of loans exist in the marketplace for a reason and none of them really helps you get where you are trying to go. It may take a while and you will have to exercise patience, but I would look to get the word out to as many landlords as possible that own the properties you are looking to start with and find one that is willing to hold the loan for you. It will not be easy, but purchasing property subject-to an existing loan or getting an owner to finance a deal happens every single day. You can do it ~

Best of luck.

 Great information, that's a lot for the idea!

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