Where to Find Private Investors for Downpayment on HML loans?

7 Replies

Hey guys, I ought always thank you guys for all your wisdom and guidance on this site. I've learned a lot so far.

I've come across two investment properties with awesome numbers. They are both residential and in a beautiful neighborhood with solid comps. There should be no problem whatsoever getting a hml to approve the deal, each has around 100K in profit after all fees, so there is a large margin of safety to work with. Each house has arv around 340K. They are also on the same street!

The problem is, I don't have any funds at the moment for the downpayment on the hml. It'd be such a waste to see these deals pass by. I'd need as little as 15K-32K on each deal and possibly less if I can purchase one of them Subject to the existing financing.

I'd love some options. Can you recommend a way to find private financing on the deal in exchange for a percentage return? I already have a detailed scope of work on one of the properties, so already got the ball rolling, just need to get my financing in order.

The topic should read, where to find private investors to finance the downpayment on the hard money loan. Apologies, wish there was a way to edit the title of the post atleast. 

Yes, the next meeting is a few weeks away. But good point, might be worth my time to even travel a few hours if I find one in a few days. No time like the present!

Please keep the ideas coming!!

Originally posted by @Tim Ivory :

Hey guys, I ought always thank you guys for all your wisdom and guidance on this site. I've learned a lot so far.

I've come across two investment properties with awesome numbers. They are both residential and in a beautiful neighborhood with solid comps. There should be no problem whatsoever getting a hml to approve the deal, each has around 100K in profit after all fees, so there is a large margin of safety to work with. Each house has arv around 340K. They are also on the same street!

The problem is, I don't have any funds at the moment for the downpayment on the hml. It'd be such a waste to see these deals pass by. I'd need as little as 15K-32K on each deal and possibly less if I can purchase one of them Subject to the existing financing.

I'd love some options. Can you recommend a way to find private financing on the deal in exchange for a percentage return? I already have a detailed scope of work on one of the properties, so already got the ball rolling, just need to get my financing in order.

Call friends and family members. Someone in your circle has to have access to "as little as 15k-32k on each deal" 

Good idea, I have some family members I could reach out to and some friends who may be interested.

I don't mean to say 30K isn't a lot, just relatively speaking, compared to 350K, or the loan amount itself, 220K. If it was me personally, I'd really want to get to know the person and the deal before investing that amount. I'm happy to talk anytime to go over the plan, the scope of work, contractor arrangements, and even personally walk through the houses if anyone is near Morristown TN. I know the owners personally, so no chance the deals will get stolen, haha.

The answer could be in front of you, @Tim Ivory .

Ask your 1st position HML for some references to other HML's that will loan in 2nd position. Many smaller lenders, who might not have the resources for purchase money loans, will make seconds for the down payment and/or rehab. There are other even larger lenders who specialize in and even prefer seconds.

If your first position lender allows seconds (some will and some won’t) they will often know those who loaned behind them. The first phone call most wise 2nd position lenders make is to the senior lender.