Funding Multi-Family Investment

5 Replies

I am looking into purchasing multiple Multi-Family homes and plan to rent out the units. My concern is the money down. Will private lenders lend the money with no downpayment and higher interest rates? And if so what are the usual requirements for such a loan? 

Yes it is possible they will loan you money with nothing down.

However, they will always need you to bring something to the table. Anybody can say they will make money if they could borrow it but lenders only work with people that they believe are highly unlikely to default or even be late on a single payment.

One way to see who will make the payments is a downpayment. If you can't bring a downpayment, the only way I could see a lender working with you is if you had a track record of paying back loans and making money on multi-families.

I guess another reason a lender would work with you is if he/she were desperate for a buyer. This usually means the property couldn't sell otherwise. Don't expect lenders to just hand out high interest loans to risky buyers. At 0% down you have no collateral and could run away the day after the loan is made.

Short answer, yes they will loan. Focus on what you can bring to the table. If you are a beginner, this might be difficult unless you have relatives with money. Find a way to create a track record for yourself that will separate you from the billions of other people that want loans with no downpayment.

I also want to mention that I am by no means an expert but as far as I know these are the only ways a lender would work with you. The best thing you could do is find some local lenders and just ask. This won't cost you a dollar and the answer you get will be definite because they are the ones with the money.

Good luck!

I agree with Roger, the chances of getting a loan with 0% down would be close to 0%. 

You need $ to make $. Almost anyone can ask a lender a loan and say the income producing property will be able to pay you back. 

Just like the Lottery says "Hey, You Never Know"

Good luck with your search.

@Desiree Claudio  

Welcome. You have received some good answers. Fill in the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 90 past ones to catch up on.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers. You will also meet some people with money that you could work with here.

Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook

Consider checking out HUD homes for small multi's owner occupied gets first crack.

You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good Luck

Paul

Thanks everyone, this is great stuff. I will definitely check this out. 

@Roger Vi  

I appreciate your response to Desiree's question and see you're located in Everett. I'm a new REI in Kirkland and would love to connect. I sent you a separate colleague request and look forward to hearing from you.

R/ Juan

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