Buying My 2nd Multi Unit

8 Replies

Hello, back in March I bought my first duplex secured by an FHA mortgage. I occupy 1 unit while the tenant pays my mortgage. The neighbor next door owns a 4plex and would like to sell it to me for a great deal. However, I don't have access to 25% down for an investment property. Does anyone have advice on how to secure financing with minimal out of pocket?

Congratulations on buying your first place and getting a second one setup.

Would the neighbor be willing to finance the deal?  Have him carry a note with a balloon payment in a few years.  Then you could be able to refinance with a more traditional mortgage.

Yeah the seller finance route and conventional refinance out if there is sufficient equity will be a good route to take amongst many others.

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There are many creative ways to buy investment non-occupied properties. The easiest is to do a first mortgage hard money or private money loan at 65% LTV and get an equity partner to go in with you on the remaining 35%. So if you have 17.5%, then get an equity partner for the other 17.5% and split the profit 50/50, or if you have 3.5% then split the property 10/90 or whatever you can negotiate.

That's just one way to buy a non-occupied investment property without 20% down.  Just make sure you calculate the deal and te exit before you enter the deal.  I use models with inputs, actions and outputs.

God Bless You!

If they don't have much equity than they may as well do a land contract. I'm on my phone or I'd link the thread here myself....go check out my posts in a thread about how to scale your rental business. I purchased 24 units over a 2.5 year period for more than $950k total for around $20k out of pocket. Most of that was cash flow from the properties. I really go into step by step detail on how to structure the down payment and so on. Just search through my posts and it will be easy to find the thread. Or search "how to scale".

Big down payments on buy and hold properties are a sign of a non-creative buyer IMO! The key to any deal is this, you have to have a way to get your cash out of a deal ASAP or you will be limited in the number of deals you can do. The less you put in, the easier it is to get out :)