Buying investment property with less than 25% down

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Buying investment property with less than 25% down

Tarcizio GoncalvesPro Member
Rental Property Investor · Palm Beach County, FL · Member since 2016 · 150 posts · 40 votes

Hi everyone,
I am looking into buying my first investment property (not owner occupied) and was wondering if there is a way to buy it with less than 25% down. Things I've read so far say either 20% or 25%. Any help would be greatly appreciated
Thanks

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David Faulkner
Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
9y

Buy it as a primary residence for less than 25% down. Live there for a year or two while you fix it up. Turn it into a rental. Voila! An investment property for less than 25% down.

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  • Josh Mitchell
    Real Estate Agent · Naperville, IL · Member since 2013 · 402 posts · 177 votes
    9y

    @Tarcizio Goncalves Yes, you can buy with less than 25% down. Different lenders will offer different programs and allowable LTV limits on investment properties. Call around and just start asking! Good luck.

    1Reply
  • Mohammed Ahmed
    Portland, ME · Member since 2017 · 29 posts · 9 votes
    9y
    Tarcizio Goncalves Hi and welcome! You definitely can buy properties less than 20% If this property is your first to own you can apply to FHA loan with low as 3.5% down. If you are a veteran you can use VA loan with 0% down payment ( I wish I am one ). You can read books about creative financing like seller financing and partnerships. I forget to tell you that with FHA loan I think you need to be owner occupant! Check this website http://www.bankrate.com/finance/mortgages/7-crucial-facts-about-fha-loans-1.aspx You can also use USDA loan if you want a single family house and also you are the owner occupant this goes down low as VA loan. I wish you all the luck
    1Reply
  • Michael Cohen
    Investor · Towson, MD · Member since 2014 · 472 posts · 257 votes
    9y

    Hi @Mohammed Ahmed and @Tarcizio Goncalves -

    You do have to be owner-occupied for FHA, but you can but multi-family properties (up to 4) instead of SFH as one option. Live in one and rent out other three.

    0Reply
  • Mohammed Ahmed
    Portland, ME · Member since 2017 · 29 posts · 9 votes
    9y

    @Michael Cohen

    can you buy USDA with 4 units and live in one and rent the rest or it has to be SFR?

    0Reply
  • Tarcizio GoncalvesPro Member
    OP
    Rental Property Investor · Palm Beach County, FL · Member since 2016 · 150 posts · 40 votes
    9y

    @Josh Mitchell@Mohammed Ahmed@Michael Cohen thank you for your inputs. Much appreciated

    Thanks

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  • Michael Cohen
    Investor · Towson, MD · Member since 2014 · 472 posts · 257 votes
    9y
    Originally posted by @Mohammed Ahmed:

    @Michael Cohen

    can you buy USDA with 4 units and live in one and rent the rest or it has to be SFR?

    Sorry, no. USDA is SFR only.

    0Reply
  • Harjeet BhattiPro Member
    Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
    9y

    You can buy  1unit with 15% down payment.

    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    9y
    You can do 15 percent down if it's SFR
    0Reply
  • Tarcizio GoncalvesPro Member
    OP
    Rental Property Investor · Palm Beach County, FL · Member since 2016 · 150 posts · 40 votes
    9y

    I am looking for either a 3 or 4 fam building

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  • David Faulkner
    Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
    9y

    Buy it as a primary residence for less than 25% down. Live there for a year or two while you fix it up. Turn it into a rental. Voila! An investment property for less than 25% down.

    2Reply
  • Dustin Lavender
    Investor · searcy, AR · Member since 2016 · 147 posts · 111 votes
    9y
    I have never put more than 15% down on my single or multi family properties. I just tell my lender here are the terms I would like to work under and they make it happen.
    0Reply
  • Jim BlackburnBusiness Member
    Lender · Florida Based (48 states Puerto Rico) · Member since 2017 · 321 posts · 121 votes
    9y
    Tarcizio Goncalves If you could find a good buy, then temporarily come out with 25% down, improve the value, then get your cash back with a 75% cash out of future appraised value 6 months later. You'd have to tie up the funds for 6 months and you'd be rolling the dice in the future value.
    954-993-1625
    Stairway Mortgage, a Division of NEXA Mortgage LLC597 Reviews
    WebsiteView Page
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  • Keisha F.
    Brooklyn, NY · Member since 2016 · 39 posts · 19 votes
    9y

    @Jim Blackburn Hi Jim, can you go into more detail about the 75% cash out 6 months later? I'm in the process of trying to buy a mixed use building (10 rental units and 4 storefronts) and I'm trying to put less than 25% down. I have 25% available to put down but don't want to use all of my liquid cash. I already own a owner-occupied property so I no longer qualify for 1st time homebuyer programs. Any suggestions? 

    0Reply
  • Keisha F.
    Brooklyn, NY · Member since 2016 · 39 posts · 19 votes
    9y

    @Jim Blackburn the property i'm looking to buy is in Chicago by the way

    0Reply
  • Federico Gutierrez
    Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes
    9y

    General rule of thumb is 20% down for sfr and 25% for multi units 2-4 units

    I do know some lenders do 15% down for sfr.

    0Reply
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