Investment property - 10% down?

14 Replies

Hi -

Has anyone has recent success in purchasing an investment property where you obtain two loans -- one for 80% LTF and the other for 10%, and you put 10% down yourself?

Just wondering if the above scenario is still available to finance properties.

Looking at a 3rd rental and placing 20% down will hurt.


Go talk to a small local bank instead of one of the big boys. Right now I can get loans with 15% down.

Thanks Ryan. It's nice to know that at least some small or regional banks will allow 15%. The 5% difference can to slightly improving the property and closing costs.

I'll shop around and keep inquiring. I would imagine the rate is a bit higher if they accept 15% vs. 20%, but I guess that's the price we pay.

Just get the owner to carry a second to get the numbers to work in your favor.

The senior lender has to be okay with it.

I am in the middle of a rehab right now that they are loaning me up to 85% of the ARV. Bought for 20k will end up putting 12k to 15k into rehab. House appraised for 65k. In the end I will get my earnest money back and have a rehabbed rental for free. Small local banks seem to be more flexible with investors.

With only 15% down, don't you still have PMI?

Depends on what type of deal you are doing.........

If you get a seller to hold back 10% second and I put down 15% then the senior lender is loaning at 75% LTV and no PMI is needed in many cases.

Most lenders require the down payment (whether cash or borrowed) to be seasoned at least 2 months. How do you handle that?

is this type of financing still possible? im so surprised if so.. i know pre recession, this type of loan was offered in many places, but didn't know it was still available today. if so, i may have to make a few stops tomorrow! thanks guys

Originally posted by Mindi B.:
Most lenders require the down payment (whether cash or borrowed) to be seasoned at least 2 months. How do you handle that?

there's not too many ways around that if you mtg is being funded by one of the big boys. they are incredibly inflexible these days.

In Joel's example, the down payment seasoning doesn't apply because the seller is doing a second. Both loans happen at the same time. The first lender has to agree to having the second. Some will, some won't.

In Ryan's example, its a cash out refi. You have to have the money to buy and fix the house, then refi based on a new appraised value. Again, the issue of seasoning of down payment money doesn't come into play.

We have a package deal of ten percent down on each home with a guarantee of loans on the next 8 houses from a local broker.

There is in Denver a Mortgage Company that is currently making 75% LTV refinance loans on fix-and-rent properties, but it must be rate-and-terms only (no cash-out). They also work closely with a hard money lender that provides 100% LTC on acquisition and repairs, up to 65% ARV (maybe 70% ARV on some deals). Both companies currently operate only in Colorado on 1-to-4 unit residential only.

I've met investors who are using these lenders to buy Denver-area fixers with hard money, then refinancing for long term fixed rate cash flow. They are building positive cash flow with nothing down (100% financing).

Jeffrey, would you please share the company in Denver you refer to? Thanks!

Contact Capital One. I'm working on a loan with them and putting 20% down. But as I was talking to the bank initially they asked how much are you putting down? 10%? So some banks may let you put down 10% but I'm sure it depends on your credit score, etc.

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