short term down payment loan until my other property sells

6 Replies

Question for you guys - I've found an investment property that I REALLY want, believe is a great deal, and will be very profitable long term.  Purchase price $480k.  So need $96K for 20% down payment.  I own another property (no mortgage) that I've listed for sale at $139k, so obviously that would cover the down payment, problem is it's not going to sell before I need to make an offer on this new property (which is now).  What is the best way to go about getting a short term $96k loan for the down payment on my new property, which I will be able to pay back as soon as my old property sells?  Thanks so much everybody! 

Lurkers: If you have a bunch of equity sitting around doing nothing, at the very least get a maxed out HELOC. They're available with no closing costs, sometimes not even the appraisal. 

Hi @Matt Riley , I'll assume you don't have that HELOC, or you wouldn't be asking the question. :)

You could write the offer contingent upon the sale of the other property. You could get a little creative, like "Matt to decrease asking price of the property pending sale by $10k upon acceptance of this offer, and will accept the first offer from a preapproved buyer at that price point" to let them know you're serious.

OPM or a HML on the property pending sale. Unsecured borrowed funds can't be a down payment paired with a FNMA loan, but secured borrowed funds can be. DTI would still need to work.

You could write the offer contingent upon getting a HELOC. Texas has wonky HELOC rules that I'm not up to speed on.

None of the 3 are perfect, it's possible you simply will not be the strongest offer, but those are some options.

Originally posted by @Todd Rasmussen :

@Matt Riley @Chris Mason

Could Matt cross collateralize? Or is the sale going to mess that up for a reason I'm not considering?

No reason that couldn't work in theory, but that would probably be slower than a HELOC + vanilla mortgage, or sell and then buy (assuming the other property is priced to move, not priced to go stagnant).

You could put a small amount down as earnest money and then work all the resources to come up with the funds.

I assume you have no assurance your offer will be accepted in the first place?