The little to no money down hard money rehab loan still remains at the top of the list of loan requests I get (all the time!).
Basically I get a the client who wants me to find them a lender who will buy the property and fund 100% of the rehab expenses.
This is a very tough request to fill because most hard money lenders and finance companies are a little more protective of their money. In this scenerio the borrower is asking the lender to take on all the risk.
Again, very tough to find a lender excited about this scenerio, especially in today's climate with a lot of borrowers who have a strong down payment or other property to pledge as collateral.
That's pretty much the point of this post, to suggest a few options for the would be property investor who is a little light in the down payment department.
The no money down hard money loan requests that I have seen close have had borrowers share the risk some other way. One common way is if a borrower owns other real estate that has a decent amount of equity in it. A lender can use this as collateral and lend off of this property.
I've also seen borrowers bring on a partner who has some down payment money or has some property to use as collateral.
Bringing on a partner could just be a temporary option for a borrower. Granted they'll have to split the profits but it allows them to start cash flowing , impress a lender and gain some experience. Do this a few time and now you have some funds to work with and having established relationship with a lender sometimes does translate into getting a short term loan from then with little to no money down.
Jason
