How can I get the downpayment

9 Replies

How can I get the down-payment to buy an apartment building? I need 20,000 as a down payment to buy the building. The price of the building is 120,000. is there any finance companies that can lend money in Illinois.

Every lender, private or banks, will want you to have a cash injection.  You need to save up for the down payment. 100% financing does not exist. 

You got to put "Skins on the Wall". In other words you got to bring money to the table. No lender in there right mind will lend you the money to buy a property. You have to be invested in the property. Every property I have bought I have had to put 20-30 percent down.

If your serious in getting into RE investing you might want to cut back on expenses and get 2nd job on the weekend to start saving for your 1st property purchase. My wife and I did it years ago to buy our 1st home in Miami. 

Good Luck.

This is the same problem I have right now. That first down payment is tough.

@Anthony Kondor

0% down financing does exist.  You do have to do some work for it.

Reserves are good, so start saving your pennies.

Take a look at

0% Down:
NACA (https://www.naca.com)
VA Loan (http://benefits.va.gov/HOMELOANS/index.asp) Rural Development Loans (Renovations MAY be included)
(http://www.rurdev.usda.gov/HSF-About_Guaranteed_Loans.html)

those programs.  

NACA is designed for revitalization via home ownership.

The VA loan is probably the single best loan in the history of finance. Be careful though, it has a minimal amount of safeguards.

The rural development loan is also great.  Probably not applicable in Chicago.

It sounds like your just looking for some direction, hopefully my .02 will help. 

The great thing about real estate is that you can be very creative when it comes to financing. Traditional 100% is hard to come by but not IMPOSSIBLE. Either you could spend the next year trying to find the golden goose or create your own opportunity.

You have a few options. 1 find a partner to be your credit partner and take a percentage. 2 find the 20% through family and friends,  show them the power of investing and hope for the best, cash flow for a year and refi them out. 3 wholesale it use it as experience and use the cash in your next deal. 

Originally posted by @Anthony Kondor :

How can I get the down-payment to buy an apartment building? I need 20,000 as a down payment to buy the building. The price of the building is 120,000. is there any finance companies that can lend money in Illinois.

 Bring value to the seller. Every sale has a purpose behind it, and most times the investor-seller has a plan to roll over the proceeds to the next deal. Try to find out what has brought this seller to decide selling it. Find out how much equity does he/she has, if they have loans or liens on it, back taxes or mortgage lates. It's very possible that whatever the seller REALLY needs you can help with.

@Anthony Kondor  

@Anthony Kondorundefined, you can do "creative financing."  All of the ideas discussed above are in Brandon Turner's book, so get and read that.  What I have found with people is that if you are not positive cashflow now (that is you are spending less then you earn and setting money aside each month to invest), that will not change as you build your portfolio and at some point you will get overextended, making your problems much bigger when you hit a rough patch.  

I believe every investor should work on their personal finances first.  Get to the point that you are setting at least a few hundred aside each month.  This guarantees success, once you get finances under control, start working on creative financing, and you will either do something with no/low money down, or you will continue to learn so that when you have tens of thousands saved up, you will put it to work that much more efficiently.