Private Money for Down Payment on Seller Finance Deals

Private Lending & Conventional Mortgage Advice

Private Money for Down Payment on Seller Finance Deals

Accountant · Fillmore, CA · Member since 2021 · 9 posts · 7 votes

Anyone have experience using private money as a down payment for owner finance deals? I’m looking for seller-finance opportunities, but don’t have the money for down payment, fees, and/or repairs. Any advice on finding private money? Maybe there are private money lenders here?

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Chris Tarpey
Investor · Jacksonville, NC · Member since 2018 · 193 posts · 107 votes
4y
Hey!
We've used private money for a down payment before. There are a few ways to structure it, even with an owner financed deal. We usually use the interest over equity model. Meaning instead of giving up an ownership % in your deal, you pay someone interest for their money for your deal. They act as the bank. Now, this usually is done through an attorney so you can get a legal promissory note, with an interest and repayment date.
Usually we will do this when we intend to say owner finance for a year and then sell/refinance. Your lender will want to be paid back - probably faster than the term of your owner finance deal so its about making the numbers work.
The key is to share what you are doing - tell everyone about real estate without asking for money. Present an opportunity on a great deal you found, maybe start with friends and family/co workers who can earn better returns investing in real estate vice leaving in a bank account or stock market.
Best of luck!
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
4y
@Gregory Kraft
Most private money lenders want to be in first position.
You will have trouble finding one especially if you have no money in the deal.
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