How Can I Finance My First Deal?

11 Replies

Hello, I’m looking to purchase my first duplex. I can’t live in it at this point so an FHA wouldn’t work.
Are there any other options for getting a low down payment? Or some way to finance it? I’m in college so don’t have enough for 20% down at the moment but do have a decent amount saved. The duplex I’m looking at is listed $165,000 and the numbers work out beautifully.

Thank you for your help!

@Devyn Grillo

Since you're in college, I'm assuming that you don't have any substantial regular monthly income. So, an bank loan on your own will be out.

You can get a partner with the income like a family member, friend, or private investor. The other option if you want to go solo, is to try and find an owner that would be willing to do seller financing or Subject To.

Hi @Devyn Grillo in the world of traditional mortgages/lending, if it's not an owner-occupied primary residence, you're looking at 20% down payment. Same for any standard HML/PML. To echo Christopher, look at Subject To or Seller Financing.

Seller financing is an excellent option but with realtors involved your down payment requirement goes way up.  

Of course WA has excise transfer taxes of about 1.7% plus other closing fees.  Even with 10% down, your seller will basically get nothing if listed.  

Need off-market tired landlord seller-financing.  Could you do 10% down @Devyn Grillo ?  That's common for my SF buys.

This post has been removed.

Originally posted by @Sharon C. :

Do not... I say, "Do not..!" ...use your personal credit! A lot of people don't know to separate their business numbers from their social security numbers when it comes to starting their own businesses. It's not a bad decision. Yet, your personal credit is much vulnerable than the business credit side. Learn more about this way of financing before putting your personal credit risk. There is help.

Here are some links for you to look at. They are of the same website: just sending you to the pages that you'd may be interested in. 

I hope this will help you make even more informative decisions.

Fix and flip:     [REDACTED]

Get approved for business credit:     [REDACTED]

Business financing (Check this page out!):     [REDACTED]

These pages should give you a glimpse of what we offer based on your need. You can, also, obtain your Employer Identification Number and Dun & Bradstreet Number.

You are young. Use your credit wisely if this is the route you'll be taking.

I hope this helps.

-Sharon

Sharon, I know you are trying to provide helpful information, and you put a good amount of effort in your post. That said, I have to disagree about not using his personal credit. Unless he can find an angel investor, using his own credit is likely his only option. You can't just form an LLC and expect a bank to give a loan to this brand new LLC. It almost never happens as far as I know.

Most people will get their first one or two properties on their personal credit and then transfer the title to their LLC. After having established income and credit for a while, some lenders may look at lending to the LLC directly.

To OP: Unfortunately, you aren't going to get a loan (non-owner occupied) without 20% cash down. That's just how it works right now. How you get that money is up to you.

@Sharon C. I find it odd that you use the term "we" when plugging this company, but in your profile, you are a stay at home mom just getting started and looking for funding of your first project. Seems to me you should be using the funding that you are promoting?
Originally posted by @Jason DiClemente :
@Sharon Childress I find it odd that you use the term "we" when plugging this company, but in your profile, you are a stay at home mom just getting started and looking for funding of your first project. Seems to me you should be using the funding that you are promoting?

Clearly something fishy with her. I've reported and let the mods sort it out.

@Steve Vaughan Thanks for the reply! I’m from Eastern Washington as well. :)

So you’d recommend asking about seller financing? Although if there’s an agent involved they might not like that.
I could afford 10% down, it’s just a matter of weather that’s a realistic option. Everything I read says I’d have to have 20% down.

Originally posted by @Devyn Grillo :

Steve Vaughan Thanks for the reply! I’m from Eastern Washington as well. :)

So you’d recommend asking about seller financing? Although if there’s an agent involved they might not like that.
I could afford 10% down, it’s just a matter of weather that’s a realistic option. Everything I read says I’d have to have 20% down.

 I recommended finding an off-market tired landlord and proposing SF to them.  

I've only done one SF deal on a listed property and put 20% down.  10% goes to the realtors and closing costs here, so the DP requirement goes way up with realtors, plus it's too outside the box for them.  Have to convince and educate 3 parties if you have your own agent - the seller, their agent and yours.  Stick with tired landlords you find yourself for seller financing.

Good evening, Mr. DiClemente:

It's nice to have met you; all of you on this panel. I have been blessed to be a Stay-At-Home Mother and wife. Yes, I did say "we", because I do represent an agency that provides business credit. I am, now, aware that I was out of my boundaries promoting what "we" offer and do apologize if I aroused any negative feelings. There was a need; therefore, wanted to help... if it was possible... not guaranteed.

It has been a very good while since I've registered onto this website. Yes, I was looking for funds to fix and flip a piece of property at the time.

I've learned so much on my journey. Yet, I do understand that every suggestion does not work for everyone.

Again, please, accept my apologies. Have a great weekend.

Sincerely,

Sharon

I know some private lenders will allow for 90% of the purchase price if the loan amount is 75% of the value of the property. If the $165,000 price is a good deal and the value comes in higher, you may be able to get away with the 10% down on the purchase price! That's how it works sometimes here at Civic. 

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