Are there any loans out there that can be used as a down payment?
I’m in the very beginning stages of starting a side business and don’t have much capital to start. We are looking to buy some cheap real estate, remodel it and rent it out. What are my options here in terms of loans?
Thanks for the question.
Most lenders want borrowers to have “skin in the game” meaning putting some of your own money down. Fir fix-and-flip loans, it can vary. If you find lenders offering 100% financing for a fix-and-flip, I’d be wary since there are predatory lenders out there. There are hard money lenders who will lend 100% of the rehab costs, but not 100% of the purchase and rehab costs. I’ll attach a few links to articles we have on this.
If you need down payment money, you might consider friends and family. If you go this route, and need financing, make sure the lender will accept this as a down payment. Also, make sure your investors know the risks involved.
Here are some articles on fix-and-flip financing.
Hope this helps!