Hard money lender for down payment?
Hi all,
I recently found a multi-unit (duplex) property I am interested in the Bucks County, PA area. The property is a duplex with 2br/1 bath each unit, with monthly cash flow of $2500 month when both units are rented. Both units are currently rented and tenants have 7 months left on their lease. I recently was pre-approved for a loan up to $200k, at 4.75%, 30 year fixed. With the current taxes, the loan estimate for the bank would be roughly $1000 a month with 25% down. The property costs $255k, so with 25% down, I would need $63,750 for down payment. I was planning on using a private investor but that may fall through. I was now looking into a hard money lender to use only for the down payment. Has anyone used this strategy for a down payment before? Essentially I would have a mortgage with the bank for the loan of the house, and a monthly payment for the hard money lender lending the down payment money. With the current cash flow and mortgage around $1000, if the hard money loan was under $1000, it would still bring in a good amount of cash flow. I would prefer much lower, but not sure the max you can stretch a loan like that. I only have had experiencing with conventional loans when purchasing the home I live in. This property would be 100% investment/rental income buy and hold.
Any recommendations would be very helpful.