Will hard lenders lend money for down payment?
[{"id": "gi99lwm", "text": "Absolutely not. 18 month record on banks statements or sources proving it was not borrowed.", "replies": [{"id": "gi99scn", "text": "What\u2019s the best way to get a down payment for a CRE property?", "replies": [{"id": "gi9azxy", "text": "Money pooled together from a family or llc investment. In west coast, about 80% commercial, residential multiplex is done in cash. On huge projects one gets a smaller loan(50% down, 50% commercial mortgage).", "replies": [{"id": "gi9yidw", "text": "Really? I had no idea there was so little leverage on west coast txns. Is it mostly entities funded through  pools of SBLOCs and HELOCs?", "replies": [{"id": "gia2lbh", "text": "Plenty of people strike rich from high tech, stock options. Foreigners often pay cash because they have no proof of US employment etc. The income level is way higher than rest of the US. 300-400K salary for a young couple techies is fairly common.", "replies": [{"id": "gibrai4", "text": "You don't need proof of employment for a commercial loan, the bank underwrites the building, not the borrower.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "gi9j2na", "text": "Dude: hard money lenders WILL. Have you ever met some of these sketchy hard money lenders? That's their thing: secret down payment.  \n\n\nOh, you're thinking of residential rules. I'm talking commercial. It happens. ALL. THE. TIME.", "replies": [{"id": "gi9ju5i", "text": "5 units or more is commercial property by default. 16th year in biz. Anyone get caught lose their nmls and state licenses immediately.", "replies": [{"id": "gi9k6vo", "text": "Yeah but commercial loan and you're golden. Like you can use a HELOC for a down payment on a commercial loan.", "replies": [{"id": "gi9kcki", "text": "HELOC=Cash", "replies": [{"id": "gi9kn2y", "text": "That's right. But on my commercial loan my banker did not care where the money came from. No proof of source was required.", "replies": [{"id": "giao1w3", "text": "Same", "replies": [], "depth": 7}, {"id": "gibcekq", "text": "What it boils down to is that OP asked whether a hard money lender would lend him money and the answer is yes.  If you can show a paycheck then *someone* will lend you money at a crazy rate and they don\u2019t care what you use it for.\n\nWhether your primary lender will accept that money is a different question. If they don\u2019t care at all where it\u2019s from then of course you can use hard money or drug money or money from terrorists or whatever.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gi9a3jk", "text": "Buy with a tenant in your pocket. A creditworthy one. Or perhaps a take back mortgage.", "replies": [{"id": "gi9ajyq", "text": "To clarify, if you have tenant in hand on a vacant property, can you get a higher ltv or lower down payment if the property increases in value subject to the new lease?", "replies": [{"id": "gi9an5r", "text": "Bingo \ud83d\ude09 that\u2019s how I do it.", "replies": [{"id": "gi9aslx", "text": "Will all lenders do this or just specific ones?", "replies": [{"id": "gi9axxv", "text": "Not all lenders, but there are a few that will. There are two ways to go about it 1) build a relationship with a few private lenders or 2) opt-in for a bridge loan", "replies": [], "depth": 5}], "depth": 4}, {"id": "gi9s6k5", "text": "But you would still need 25-35% down right?", "replies": [{"id": "gi9vw0v", "text": "Not really, because if you have a creditworthy tenant, then a reevaluation of the property will show that you are buying it with Equity. \n\nFor example:\n\nYou have an 8,000 SF vacant building under contract for $500,000 with $10,000 earnest (you have to put a little something down to secure the property). Suppose you have a 90 day due diligence period, and during that time, you hustled your ass off and secured Family Dollar as a tenant. Family Dollar\u2019s typically sell between $1.8-2.1M. Using a value of $1.8M with the tenant in place, the bank will lend you between 65%-75% LTV. Let\u2019s say 65% LTV; the bank will lend you $1,170,000. You now have $670,000 as equity. Therefore, there\u2019s no need for additional capital above what you used to secure the property ($10,000) in this example. It sounds simple, but it takes a lot of work to obtain a creditworthy tenant. Nonetheless, it\u2019s doable.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gi9lnb9", "text": "Yes, hard money lenders will do anything for the right %%%%. But the main lender (normally a bank) giving you the bulk of the money won't like that your down payment is financed.   \nBorrowing money for a downpayment really doesn't work well unless you're ready to commit fraud... Pro tip, don't commit fraud.", "replies": [{"id": "gibc2vz", "text": "Illegal life pro tip, commit fraud.", "replies": [], "depth": 2}], "depth": 1}]