Down payment for multifamily

9 Replies

Greetings BP Family, I am interested in purchasing multifamily properties but unfortunately I dont have the 20% to use for my down payment so I am trying use creative financing to obtain a property. My scenario is to have 75 to 80% financed by the bank, have the seller take back a 2nd of 10 to 15% and i would put 5-10% . Can anyone offer any suggestions in finding sources for down payment?

we just bought 32 units.  70% bank, 20% seller, 10% me. Total price $960,000.

That's great  Arlan, congratulations, I  hope I  will have an opportunity to  put a deal together like yours.

Arlan, did you have the bank financing in place first before you asked for the seller financing?

I don't know if you would be interested, but my wife and I just picked up a Fourplex for 0 down through the VA. If your not a Veteran there is FHA that you can can now use a 3% down. The catch is you have to live in the building for a year.

Always a good idea to be sure you're financable before looking for property.  And find out the details of the loan.  The kind of loans being discussed here (70% bank, 20% seller, 10% buyer) are commercial loans, not 30 year fixed rate.  So you will want to know your choices when you start analyzing your possible deals.

That last 10% is really YOUR cash that you need to bring to the deal.

To purchase my first multi-family, I got a loan from one of my retirement accounts (loan, not withdrawal).  

I had a fair amount saved in a 403b retirement account and I was able to get the rest of the down payment i needed via this loan.  I was able to decrease my equity exposure in the retirement account and it allowed me to fund a deal that still has positive cash-flow with less actual cash out of pocket.

Jason

I have been working with banks for years. Have a good relationship. I just assumed that we could get financing. We made our deal with the seller asking for the seller financing and the banks had no issue with financing 70% if sale price, which turned out to be 66% of appraised value.

Originally posted by @Arlan Potter :

I have been working with banks for years. Have a good relationship. I just assumed that we could get financing. We made our deal with the seller asking for the seller financing and the banks had no issue with financing 70% if sale price, which turned out to be 66% of appraised value.

That is pretty awesome.  I am searching everywhere in NW Washington for something close to that.