would you recommend me using hard money for a down payment

would you recommend me using a hard money lender for a down payment if the owner is willing to owner finance i currently dont have a job but i do have excellent credit and a 25,000 credit line do you think hard money would be a good choice the property brings in 15,000 a month and i would need 190,000 down
In Buying Property - Asked by BILLY S. - Jan 7, 2009
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Joe V.
Plymouth, MI

No. There are other ways to accomplish this without the cost of Hard Money. If you plan on doing this more than once, meaning buying more than one property, you might want to look into 100% financing and use your LOC for the misc. costs up front. You could also get a larger LOC quickly through other sources that you could use on more than one property. 100% financing should mean that you not only get your purchase paid for completely, but you would get paid back on any up front money through the same financing...this way you would get to use your LOC money over and over again on mutiple deals.

Jan 8, 2009
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Ranji B.
Norwalk, CA

I see no problem with it. Just make sure your rental income will be enough to cover both the seller financing and the hard money loan. If you could possibly find a private investor or individual that probably would work better. You could offer the investor a good reasonable ROI and it would possibly be less expensive than a hard money lender because of the interest they charge and points associated with their funds.

Jan 8, 2009
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Andres G.
Miami Beach, FL

Hell yes! Using subordination is an excellent strategy in today's market. Creative solutions are necessary for today's common real estate problems. Remember most hard money lenders are going to max out at a 1 year term so it is important to keep the exit strategy during the due diligence portion of your analysis. I would strongly consider this option if the 1) property has significant upside that can be realized quickly, 2)I know I'll be able to come up with the down payment within a year (utilizing lines of credit) a refinance of the property (through a credit partner) or the sale of the property (make sure to analyze the time on market for comparables).

Jan 11, 2009
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Chris S.
Coeur D'alene, ID

Sounds very risky to be that highly leveraged on anything in the current market. Regardless of how much the property "brings in", what's your debt service going to be? If your monthly debt service is $100,000, you're going to be upside down from day 1.

Jan 16, 2009
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