Financing with a partner

3 Replies

Happy Tuesday everybody,

I am actively searching for multifamily rental properties with the long term buy and hold strategy in mind. It is my first deal, so I am looking for a place that won't require a great deal of work up front but still offers some room for cosmetic enhancements to increase value. Since it is my first deal and I will not be living in the property, I have had a hard time finding financing requiring less than 25% down. I am curious to learn how partnering up might make financing a little easier. What exactly does the lending process look like with a partner? Any information is extremely appreciated.

Additional background: I am looking for properties in the suburbs of Chicago or any (excluding bad crime) areas within the city. I recently graduated this past year, work a full time job, and have been able to save up nearly 35k so far.

@Aaron Bruck - If you are not going to live there then 20%-25% down is the best you can get.

Low money down programs are only if you owner occupy 

If you have a partner you will likely be using a LLC - which would be a commercial loan and still 20% - 25% down

Brie Schmidt, Real Estate Agent in Illinois (#471.018287) and Wisconsin (#57846-90)

Whether a partner makes the financing easier or more difficult to obtain really depends on their income, debts, credit scores, and real estate owned, but assuming all that is in check then hopefully it would be easier if they are bringing the additional down payment. As Brie mentioned, low down payment solutions (3.5%-5.0%) are reserved for primary residence/owner-occupied scenarios. Not sure if this answers your questions, but just let me know if you have others!

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.