I'm looking for some ideas and feedback on ways to fund the 20-25% down payment that is being required by the lender I am currently working with.
Quick background: off-market property, asking 140k, comps are selling 200-250k (from what I've found at least, I'm still new), planning on cash out refi or just plain refi within 1 year once its rehabbed and rented (BRRR time!).
First, should I find a different lender that requires less down payment? Unfortunately can't make this my primary, and apparently even second home rates are crazy now.
Second, if I do 20-25%, what are some ideas to get that capital? Find partner who I'd buy out within 1-2 years with set terms? Or something with the current owner offering seller financing until the refi?
Any and all advice and assistance is greatly appreciated!
If you have a primary residence, think about taking out a HELOC for up to 90-100% to cover the down payment. If not, get the seller to carry back 15-20% with you coming in with 5-10% down and the hard money lender for the rest? Partner up, 50% of a watermelon is more filling than 100% of a grape. Get a loan from family members? Just to name a few.
If you are not living in the property and it's used for investment purposes, you will be required to bring the 20-25% to the table, no matter who the lender is.
If you can't provide the funds yourself, your best bet is to partner with someone else who can provide the funds. You can find these individuals on bigger pockets, meetups, your local church/mosque, etc. Most capital partners will show interest but won't commit until you show them an actual deal.
Also, capital partners are hesitant to invest with someone that has no money in the deal. So save up and get some skin in the game.
Seller financing is hard to find but a blessing when you do.