checking on loan information
Does anyone know if there is a loan that can be obtained that does 5% down on an investment property?
I am looking at a duplex for $180k. I don't have the 20% down. This would be my first investment property.
I am in a small area and these don't come up for sale often so I am trying to get it figured out quickly.
Even with only 5% down, it still has $300 in cash flow.
Unfortunately, the answer to your question would be to call as many local banks as you can and ask around. Very time consuming yes, but once you find a good local bank you can work with, you can go to them in the future right away once you find another deal.
Being a lender, even I am not aware of a 5% down on an investment property. However 3.5% down can be done on an owner occupied property with an FHA Loan. However, do not buy an investment property via an owner occupied loan that you do not intend to live in the property for at least 1 year.
Besides that, I have one of my hard money lenders that will loan with a 5% down on an investment property, but some rehab is generally needed on these properties. You need a situation where rehab is needed as you need to force appreciation to where you have 25% equity, because you will need to refinance off hard money into a conventional loan at 75% LTV or having 25% equity.
I hope this helps?
Hey Shane! There may not be too many Hard Money Lenders who will provide 95% purchase price financing. 90% on the purchase price is achievable with many HMLs if you have experience. Otherwise you'd be looking at 80-85% on the initial purchase price. If you have a property that you're looking to purchase with 5% or less down then you would make a connection with a Private Money Lender more likely. You would also likely need to be in an all in position of 70% ARV or less making it a low risk deal for the lender providing you with a majority of the cash needed.
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thank you.
thank you!