I’m looking to purchase my first rental property (preferably multi family/duplex) to start generating some cash flow. I currently own a home (3 bed 2 ba) and rent out the other two rooms to help out with mortgage payments. I have good credit (740+) and a pretty good amount of cash saved up. I’m just shy of having enough for 20% down on most decent properties. My question is whether or not it’s possible to get approved for a loan with less that 20% down on a property that will not be my primary residence? From research it seems like most people get started by owner occupying their first property so they can put down 3.5%-5%. I already have a primary residence and don’t want to move out or convert it to a rental. Looking for a creative strategy to get financed on my next move. Thanks!

@Greyson Calem good luck with your REI journey!

@Dmitriy Fomichenko Thanks!

Hard money loan funding institutions will lend you more than 80% LTV but the interest rate is higher. :)

@Greyson Calem Sounds like you are off to a great start. With most conventional mortgages you are going to be looking at that 20% down payment requirement on a rental. I believe with some private money lenders (higher rates) you can get away with a lower downpayment amount on certain products such as a fix and flip loan product. You could potentially do a quick flip and use the proceeds from that deal to close on the next buy and hold. Hope this helps. 

Good luck saving up you are so close!

@Greyson Calem Hey Greyson, not sure if you’ve looked into owner financing yet or not. I’m closing on a Duplex Tuesday using owner financing. I’ve found a few different properties that the seller was willing to owner finance. Two of those accepted my offer of 10% down ( I didn’t close either of those due to inspection issues). The one I’m closing on next week I’m doing 30% down due to it being Multi-Family. I wanted the seller to know I mean business and will have a vested interest in making sure he receives his payments. But, keep an eye out for the owner finance options. Easy way to gain control of a large asset for a small down payment and lock it down. Giving you more time to secure better financing or to save financing for the next property.

Best of luck!

@Jason Shackleton I’ll get there. Wish I had started earlier but excited to begin the journey nonetheless!

@James Leigh great advice. Thanks!