Thornton, CO · Member since 2011 · 34 posts · 3 votes
Hi my name is Eric Hamilton. I live in the Denver metro area. I had a question regarding small business loans for funding the down payment to get conventional financing. I had read some literature a while back about a guy on the east coast doing this a couple of years back. I know there has been alot of changes in the ways financing REI since the recession and really dont know anyone who does this anymore. But I would like to hear some feedback wheather this can be done anymore, if its legal on paper and morally? More specific I would like to know if there are any better options for veteran small business loans. I had looked into the patriot loan that the SBA offers but it says specifically in their it cannot be used for REI. What a bummer because real estate as far as I know is the most safe business start up in the world. Let alone Joe smoh thats getting a loan to fund a ma and pa shop.
@Eric Hamilton Wow! Sorry for all the negative Nancy's chiming in here. I'm going through a similar process right not and have looked at everything from SBA to private investors. I get that you're not trying to do something shady, just exploring creative options. They're out there, it's just knowing how to structure stuff. Good luck and keep us posted. BP Meetup tonight if you want to meet more people who will help you figure out how instead of saying no.
As to your original question, you typically cannot use borrowed funds to fund a down payment, but there are exceptions. The way you are proposing, I doubt you will find a lender.
Real estate is the most safe business startup in the world? Where did you hear that? Remember about 6 years ago and the problem our economy is now coming out of, mostly real estate driven. It has the potential for the highest returns, but far from safe. As far as borrowing money for a down payment. BIG mistake. You can't afford the real estate if you can't afford a down payment. What will you do when your first disaster/crisis happens? How will you pay for it?
@Eric Hamilton Wow! Sorry for all the negative Nancy's chiming in here. I'm going through a similar process right not and have looked at everything from SBA to private investors. I get that you're not trying to do something shady, just exploring creative options. They're out there, it's just knowing how to structure stuff. Good luck and keep us posted. BP Meetup tonight if you want to meet more people who will help you figure out how instead of saying no.
Hey thanks everyone for their input. Yeah Miki its tough in the beginning because lots of lenders are real weary of new investors.And prolly for good reason. Ill also be at the meetup tonight. Got a lot of questions I wanna ask people.Good advice too Joe I agree u will have better access to funds in that scenario. I just wannna be as creative as possible and use other people money. Instead of my own u know. But in the start it might just have to be my money
So do you have any money or are you broke? Not sure of what your goal is. If it's rentals, how will you pay for a leaking roof or a busted furnace? Other people's money? What if you're doing a flip and the foundation needs repair? Borrow more money? I look at it this way. If I were lending you money for whatever it may be. What is your skin in the game? What will keep you from saying screw it and walking away from a project and leaving me holding the bag? Pretty much what has happened the last few years. People have lost equity and said screw it and walked away, now we are taxpayers are footing the bill for others.
Tonights meeting was really cool thanks for all who went.Whats with all the nay sayers from Texas.Im a born and breed texan myself but I know why I left that state after I graduated now im too much of a free spirit i guess colorado has cursed me lol, I realize ur giving me advice but what I'm asking for been before. In fact I spoke with a man at the meeting tonight on how to structure a deal with no money down. And its really still in the bankers power to approve u or not. A lot of it is how uapproach lenders and show that u did ur homework on the property vs going in unprepared then get shot down.
Look at it this way. Texas is one of the few states that took a smaller hit during the great recession. We have people moving here like crazy everyday. We're doing something right I think. Our way of thinking goes against the grain of most of the rest of the US and we get the chuckles and eye rolls from others. But people keep moving here. So that must say something. As far getting a loan from a bank, you might be able to from a smaller bank that you have established some sort of relationship with. It's too much risk for me. I need some money to handle my issues that arise. I don't like putting things on credit cards or making a tenant wait because I don't have the money. Maybe it's a Texas thing. It doesn't matter much. You'll do what you want and I'll do what I want. I've already been there done that with the crazy amount of credit and lost. It's like a house of cards, all it takes is one semi major unplanned thing to happen and it all comes crashing down with no money in reserves. Not going through it again, I've learned my lesson. I'd honestly be curious to see who on here has been truly successful at what they do has gotten that way. Not somebody with an opinion of how to do things or in a book they read. I've already been unsuccessful that way and am on my way back to success God willing.