Buying a commercial property with no money! Scam?!
The Situation: You find a 20-unit apartment complex listed for $2,000,000. The seller is motivated but insists on a $500,000 down payment. Most investors would walk away because they don’t have that kind of cash sitting around. But with the Stack Method, you can structure the deal creatively to make it work. The Solution: The Stack Method Here’s how you’d structure this deal: 1️⃣ Get a Loan for 70% of the Purchase Price - You secure a loan from a commercial lender for $1,400,000 (70% of the $2M purchase price). - This is your “first position loan,” and the lender is happy because they’re in the safest spot. 2️⃣ Seller Finances the Remaining 30% - The seller agrees to carry back $600,000 as a second position loan. - This means the seller becomes your lender for the remaining portion of the purchase price. 3️⃣ Cover the Down Payment with the Loan Proceeds - Here’s the magic: The seller receives $500,000 upfront from the $1.4M loan proceeds. - The remaining $100,000 from the seller’s $600,000 carryback stays as a note, which you’ll pay off over time. Why This Works - The seller gets the large upfront payment they wanted. - You avoid bringing $500,000 out of pocket. - The lender is happy because they’re in the first lien position. - You now own a cash-flowing 20-unit property with minimal upfront capital. How I help you: - My business is in funding the Seller Equity portion of the deal, as a second closing. So you won`t need to come out of pocket for even $1. - In the other words, you are getting paid to purchase a cash-flowing property. These types of deals need in depth underwriting, and not all the DSCR lenders will let there be a second note. - To make the process easier for you, we refer you to lenders who will work with you on these types of deals with no hassles. - The hard part is to find the cash-flowing property and get it under contract. I'm happy to hop on a quick call and walk you through everything—no strings attached. No fees until you have a contract and submit a request. I only step in when there's something real to work on.