purchasing a multifamily with little money down

5 Replies

Morning fellow BP members, 

On the road to purchasing my first property. Spent months reading, educating myself, listening to podcasts, ect. I was wondering if there are ways to purchase a multifamily without the 20%-25% conventional? I already own a SFH so owner occupied is out. Is there are any options I have to purchase a multifamily with less than 20%-25%? Any suggestions will be greatly appriciated.

When I purchased my first multi family (a quad), I went to a small local bank and they took the risk; but they also cross collateralized the loan with my primary residence.  Not the ideal situation; but 5 years later I still own them both.  If you buy it right, you shouldn't have an issue with financing....just get creative...seller second, offer additional collateral, etc.

Originally posted by @Jason Deutsch:

Morning fellow BP members, 

On the road to purchasing my first property. Spent months reading, educating myself, listening to podcasts, ect. I was wondering if there are ways to purchase a multifamily without the 20%-25% conventional? I already own a SFH so owner occupied is out. Is there are any options I have to purchase a multifamily with less than 20%-25%? Any suggestions will be greatly appriciated.

Yes if you owner occupy for a min of 12 months or as required by your loan docs and use a program similar to FHA or MCM both of which can be sold to fannie mae.

Multi owners tend to be more open to creative solutions than the average joe homeowner, so take advantage of that fact.  A simple strategy is to ask them to carry back 20% or so.  What are they going to do with that money?  Try and collateralize that with another asset or your strong character and charm!  They know the property so if they believe in it, they may be open to carrying with just a note or a note/agreement that allows them to place a lien against the property a certain time after your financing closes.

thanks everyone for the advise!!

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