My parents have agreed to sell me their house. The value of the home is $125,000 and they owe $35,000. This will be an investment property, it’s located in NJ. I tried to do a “Gift Of Equity” loan but the lender I was working with told me they can’t do that type of loan on an investment property. Are there any lenders in New Jersey that are willing to do a Gift of Equity on an investment or are there other creative options that we can do here? One thing I thought of is partial seller finance, where I get a loan for $50,000 and pay my parents directly the $75,000 but am having trouble finding a lender that will do a $50,000 loan. Any help would be appreciated.
@Steve J. what you are describing is precisely the purpose of hard money. They lend up to the a % of the ARV of the property. So if you buy below their threshold....then you don't need any money out of pocket to purchase the property. In theory at least.
However, they will be concerned on what you do with the property after you purcahse it. Hard money is short term money. Maybe 6-12 months. So you'll either have to flip the property to pay them back...or refinance - which is exactly what the BRRRRR strategy teaches! So you'll have lots of people who have done what you are looking to do already. We just need to get you in front of some locals to guide you to the right lenders.
- Post in the Bigger Pockets STATE forum that you are looking in. There are usually some good, local investors that monitor those forums. Maybe they already have a suggestion or recommendation for you? Certainly try there.
- Visit your local REI groups. There are many groups that meet across the country. Most meet online now. Some post here on the Bigger Pockets Marketplace. Many post on meetup.com. Networking is always a great practice and you never know who you might meet there and what good information they have to share. Would certainly recommend attending some in your area.
Hope this helps!
I would like to connect. I’ll send you a message