Seller assist for investment properties?

Question

Hi everyone,

I am currently looking to buy my first investment property. The property which I'm looking at is a duplex and I have just enough to pay 25% down payment. However, it seems like there will be about $10k in associated closing costs (tax escrow etc).

I'm not sure how I will come up with the closing costs. I heard that seller assist is capped at 2% for investment properties. Is there any other way to have the seller assist me with closing costs/down payment?

Owner occupancy is currently not an option for me, so I will definitely have to go with an investor mortgage...

Any other suggestions on funding the closing costs? Thank you!

Brett Russell · Answer

Hi Sophie, another thing you need to consider is that you should budget for some sort of reserves so if there is an unexpected expense or prolonged vacancy that you are still able to make your payments.

Robert Adams · Answer

How much is the purchase price?

How much is 25% down?

Do you have to put down 25%?

What if you put down 20%? Would that extra 5% cover the 10k in closing costs?

Marcus Lane · Answer

Closing cost isn't your biggest problem. A lender such as me could extend your loan amount to cover the closing cost. However you will need a reserve. And it's interesting that you haven't mentioned whether the property is performing currently (has tenants) or not. You could fund with hard money and then refinance. This would enable you to get into the property and not lose the deal. Give you time to allow the rental income to provide what you are missing now. If your eligible for financing now with a conventional their commitment should be enough for a hard money lender to accept that your exit strategy is strong...it would be expensive for sure however it would meet your goal of acquiring the property and covering the additional 10k your

Sophie Mia · Answer

Hi Brett!

I make enough money at my job to cover mortgage, taxes etc even if there was a vacancy. If I waited about 6 months, I could save enough from my paycheck to pay for the 10k in closing costs and taxes.

Has anyone tried a hard money loan or something similar to a pay for closing costs? I would be able to repay it within just a few months. However, I heard that lenders require proof of funds...so not sure if a loan for closing costs would be acceptable?

Seller assist for investment properties?

Seller assist for investment properties?

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