Help! What do I need?

[Jason Kang]

Hey all,

I'm about to secure private funding for a deal, but I'm still trying to figure out what kinds of loans I can and should be considering. It looks like getting a traditional loan under my name will be tough because the private money will look like temporary funds to the lender, and I don't have the money to fund the deal myself yet. So does that mean I should be looking for a commercial loan (where my money + the private money will be put into an LLC)? Or what other options would I have?

[Steven Goldman]

Jason: You can obtain money from Jr. investors for the down payment. you will have to make them partial owners of your LLC. Less than 20 percent. You can then finance the purchase or purchase and rehab. Hard money lenders will not investigate the source of your funds, so long as, they are in your LLC account. You will also need six months reserve equaling the mortgage payments in a bank account or other type of account. (i.e. savings checking or 401k IRA etc.)

Many of our flippers or holders raise money from private sources for their contributions it allows them to keep moving without having to have large amounts of capital.  Jr. Investors can be found at RE meetups and also online at investor groups. Good luck.