Questions, questions, questions!

[Tom Port]

Hey everyone, 

I appreciate the power of Google but with so much conflicting info out there I was hoping I could leverage the knowledge of this wonderful community. 

Currently own 3 single family homes (In the UK) and trying to get started here my questions are; 

Do I need to have a conventional mortgage before I get financing for a multifamily? (This is a perquisite in the UK)

If so, am I looking at 20% down payment on multifamily units? 

I'm in a comfortable position in cash currently and I am planning to be aggressive in the next 3-5 years I just want to understand how best I can reach my short term goal of 10k recurring income. 

Thank you so much! I wish I could add some more value to the community but I am afraid for the moment I am just asking Qs! 

[Todd Dexheimer]

Originally posted by @Taylor L.:

- In the US, you do not need to have a conventional mortgage on your primary residence before you can finance a multifamily. I've never heard of this or experienced it. No lender has asked me that.

- 20% down: yes, and sometimes more depending on the deal. BUT... It's not unheard of for folks to do multifamily deals with less than 20% or nothing down. That takes a bit more creativity and seller financing. 

@Todd Dexheimer did you do a multifamily deal with under 20% down recently? I think I recall seeing something like that on one of your posts.

 I did, but that was seller financing. We put 8% down on the purchase price and put an additional $600k into an escrow account that could be accessed by the seller if I default and accessed by me as work is completed. Total down ended up around 18%. 

On a traditional purchase, I would be counting on at least 25%. The Debt service coverage ratio will need to be at 1.25 on a current T-3. That is what will effect your down payment the most. In today's environment I am seeing most buyers bringing 30-35% down on multifamily