I'm trying to figure out how to finance a purchase on a multi-family that my friend, my friend's dad and I have been looking at. It's only $43,000 but we don't have that amount on hand. Do we have to take out a mortgage in only one of our names? Will it be difficult finding financing for such a low amount?
Just a newbie
You can find financing for numbers like that, although typically it's a lender who works with a lot of 'fill-and-kill' type investments. You typically want a nice match, I would look into a credit union (in the area) or something along those lines. They have an interest in the community, and want to help out local occupants, landlords, and investors.
My lender in NYC, for instance, will not touch anything under $200,000. It's not because he's too good for it (he actually encourages me to buy in the Midwest). It's just that he can take calls from $1,000,000+ buyers on a regular basis.
Keep in mind any repair cost(s) you may have for that low of a price, because that money definitely has to come from somewhere as well. Best of luck.
Did you try going to your bank to get a line of credit. Also, if your friend owns property and has some equity in it, you could apply for an equity loan.
If you want to do a house hack where you would live in one unit and rent the other one out. Credit unions offer a FHA loan with repair costs at low interests rates. You would have to live in the property for a year. At least that is the rule here in California.
Hope that helps you.
Where is it? I think you should be ok as the loan would be for $34K loan amount (80% of the purchase price). Most lenders care about the loan amount. I have typically seen a $30K+ min loan amount in the Midwest if I remember correctly. Also, from my recollection there is cut off point (I think its 20% in ownership) for people who have to be on the mortgage with you if you buy using a conventional mortgage but I only asked one person about that for one deal so I would definitly ask a lending officer.
Unfortunately I can't go under 50K in loan amount but if you can find a local bank that has no overlays they should be able to assist you.
I hope this helps and have a wonderful day.
Thanks everyone. I'l definitely try a few credit unions. @Melissa W., so your saying that credit unions offer FHA loans with repair cost built into them?
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