Purchasing Equity With Intent to Refinance - HELP
Hi BP - I have a family member who owns a small portfolio of duplex/4 plexes in a collage town that cash flow well and he is willing to sell one to me for around $400k. Due diligence and the numbers look great, but I only have around $50k cash so don't qualify for a traditional 25% down investment property loan.
Since he owns the property through an LLC, he is willing to allow me to buy equity into the partnership now with the $50k cash, with the option of purchasing another portion of the partnership next year. I am considering doing so however, would like to buy him outright next year to obtain full ownership of the partnership and property it owns. Can I do a refi next year on the property considering I will own equity? Is there a financing solution I am overlooking? I have excellent credit, no debt, and qualify for well over the value of the property which is why I want to leverage the deal. We have agreed on the Operating Agreement/legal terms, but wanted to get your thoughts on if this is a good approach and/or if there is another option I should consider. Thank you all
-Joey