A private investor has completely paid off home worth roughly $300K,a well funded 401K, no debt. They do not really have any liquid cash. They will fund the majority of the project and I will provide site supervision, scheduling, and deal with permitting. My question is, how do I tap into this? Home equity line of credit? Just go to the bank with the investor?
Any help would be appreciated.
Thanks in advance.
Mortgage on the home, 30 year loan on the cheap! He can always pay back faster, if he wants
Tough to convince a debt-free person to risk their home by taking debt out on it I'd bet. That didn't happen by accident. Large principal payments were sent in month after month, punching the debt square in the face.
If you offered to pay the loan costs (about $4k), they may go for a low mortgage on it? Would cost less for a HELOC or HEL.
There isn't much that can be done with the 401 if they are still working there. Taking a loan on that, again, will probably go against their core principles. It will also put them in a bind when their employment ends as they'll only have 60 days to repay in full or have it considered an early withdrawal.
Best bet may be as a credit partner. They take out a new loan. Problem is, banks don't want anyone on title that's not also on the loan.
Most money partners have liquid cash available and/or aren't so debt-adverse. Will you have any skin in this deal @Michael H. ? Save some if you don't have it by brown bagging your lunch, brewing your own coffee and avoiding car payments. Drive a functional beater to your first closing with pride. Cheers!
@Steve Vaughan "drive your functional beater to your first closing with pride" awesome advice!!
@Michael H. Did you ever get this project funded?
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