Creative Real Estate Financing

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John E Ceisel
  • Developer
  • San Diego, CA
11
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35
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Financing Unwarrantable Condo

John E Ceisel
  • Developer
  • San Diego, CA
Posted Nov 4 2014, 16:25

Hello,

I own 3 out of 9 units in condo complex (it's a single building complex).  Because that is 33.3% of the units, the complex is no long warrantable according to Fannie Freddie guidelines.  In the past, I was able to get portfolio loans from Credit Unions to finance my purchase of the units. 

There are 2-3 units coming on the market in the near future that I would like to grab as it'll be low overhead and I know the market rents, the building, and am on the board of the HOA.

That said, I am having trouble getting financing.  They'll be around $150k each based on current market prices.  I'm happy getting one or two of them for the time being.  I can't get conventional financing or any more portfolio loans (not a primary residence). 

Any ideas on how to finance? I have a HELOC available with $53k, but not sure what the best approach is to get the other $97k. I'm going to have to think outside the box on this one (maybe credit cards and/or hard money, but those are all very expensive). With decent financing, these will be cash flow positive. I appreciate any feedback/thoughts you can offer.

Funding Strategies (some brainstorming)

  • Down Payments/Cash
    • Self
      • Cash from checking/savings
      • 401k withdrawal
      • Sell property
      • Sell car
      • Credit card advances
    • Banks
      • Personal Loan from
      • HELOC on existing property
      • Home Equity Loan on existing property
      • Refinance existing property
    • Other
      • Hard money lender
      • Personal loan(s)
      • Investors
        • Legal ramifications?
  • Mortgages
    • Bank
      • Conventional mortgage
      • 203k FHA mortgage
      • Investment mortgage (20% down)
    • Credit Union
      • Conventional mortgage
      • 203k FHA mortgage
      • Investment mortgage (20% down)
      • Portfolio loan
    • Other
      • Take mortgage on directly from seller

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