Creative Financing - Suggestions anyone?

[BJPastor]

Hello fellow investors,

A partner and I tied up a 4 suite building in Edmonton. We are working with a good investor minded mortgage broker for financing. We originally wanted to do 5% down, however, the lender is requesting 10%. We currently have $30,000 and require about $30,000 additional.

Here`s what we`ve come up with so far:
1) Seller is not interested in any vendor financing
2) Asked the lender if will the appraisal comes in more than the purchase price will they be willing to take the equity as part of the down payment. Still waiting for a response.
3) Hard money lender, probably temporary loan 3 months. Problem is the interest rate most likely high.
4) Borrow from family/friends.

Any suggestions of how to raise the capital, or make the deal work? We are open to all options.

Thanks in advance.
B.J.

 

[IanfSinclair]

I would suggest a 3 way JV with another investor.

QUOTE (EdmInvestor @ Sep 16 2008, 09:56 AM) Hello fellow investors,

A partner and I tied up a 4 suite building in Edmonton. We are working with a good investor minded mortgage broker for financing. We originally wanted to do 5% down, however, the lender is requesting 10%. We currently have $30,000 and require about $30,000 additional.

Here`s what we`ve come up with so far:
1) Seller is not interested in any vendor financing
2) Asked the lender if will the appraisal comes in more than the purchase price will they be willing to take the equity as part of the down payment. Still waiting for a response.
3) Hard money lender, probably temporary loan 3 months. Problem is the interest rate most likely high.
4) Borrow from family/friends.

Any suggestions of how to raise the capital, or make the deal work? We are open to all options.

Thanks in advance.
B.J.

 

[RedlineBrett]

Move into the property and qualify for 5% down as an owner occupied building.

Also, start shopping around with different lenders - don`t put all your eggs in one basket!

QUOTE (EdmInvestor @ Sep 16 2008, 09:56 AM) Hello fellow investors,

A partner and I tied up a 4 suite building in Edmonton. We are working with a good investor minded mortgage broker for financing. We originally wanted to do 5% down, however, the lender is requesting 10%. We currently have $30,000 and require about $30,000 additional.

Here`s what we`ve come up with so far:
1) Seller is not interested in any vendor financing
2) Asked the lender if will the appraisal comes in more than the purchase price will they be willing to take the equity as part of the down payment. Still waiting for a response.
3) Hard money lender, probably temporary loan 3 months. Problem is the interest rate most likely high.
4) Borrow from family/friends.

Any suggestions of how to raise the capital, or make the deal work? We are open to all options.

Thanks in advance.
B.J.

 

[TommyK]

QUOTE (EdmInvestor @ Sep 16 2008, 07:56 AM) Hello fellow investors,
A partner and I tied up a 4 suite building in Edmonton. We are working with a good investor minded mortgage broker for financing. We originally wanted to do 5% down, however, the lender is requesting 10%. We currently have $30,000 and require about $30,000 additional.

Here`s what we`ve come up with so far:
1) Seller is not interested in any vendor financing
2) Asked the lender if will the appraisal comes in more than the purchase price will they be willing to take the equity as part of the down payment. Still waiting for a response.
3) Hard money lender, probably temporary loan 3 months. Problem is the interest rate most likely high.
4) Borrow from family/friends.

Any suggestions of how to raise the capital, or make the deal work? We are open to all options.

Thanks in advance.
B.J.

Why would you only need 3 months from a hard money lender? Are you expecting some money around that time?

How about an unsecured line of credit? If you and your partner are employee with good income, then this could be an easier way to get the money from the bank than trying to raise the capital from a 3rd party (apply separately though). You should consult your mortgage broker about going this route as having a big balance on your unsecured LOC will affect your future borrowing ability.

Just a thought.

 

[donksky]

Can u or ur partner tap a secured - HELOC??

 

[Thomas Beyer]

QUOTE (EdmInvestor @ Sep 16 2008, 09:56 AM) Hello fellow investors,

A partner and I tied up a 4 suite building in Edmonton. We are working with a good investor minded mortgage broker for financing. We originally wanted to do 5% down, however, the lender is requesting 10%. We currently have $30,000 and require about $30,000 additional.
Are you sure that this a good deal in a falling real estate market ? Why not wait 6 - 12 months ?
how much for this 4-plex ?
what is the rent ?
is it a legal 4-plex or 2 duplexes with an illegal suite each ?
is there rental upside ?

I may invest this 30K with you (as may 40+ others) if the numbers look great !

hard money or a 2nd mortgage @ 3-5% fee upfront + 14-20% interest/year should be considered if numbers are good and a re-fi can be done in 6 months when rents are higher ..

When was the last rental increase given ?
What province ?
Who will manage it ?