Avoiding 20% Down on Rental Property Investment

[John Keizer]

I bought my primary residency two months ago, and have an itch to get into buying a rental property. The 20% down is the barrier at making that happen sooner than later. My thought to overcome this is that since my wife’s name is not on the mortgage (she is on the title) for our primary residency. Would she be able to purchase the property just under her name in order to be able to do a 5% or 10% down conventional by claiming it as her primary residence? Not sure if this would work, looking for insight by brokers.

[Ned Carey]

@John Keizer Possibly IF AND ONLY IF, she actually intended to live there as her primary residence. I think it is pretty clear that is not the intention. So that would be bank fraud.

Being creative and thinking outside the box = GOOD.

Breaking the law, lying, or committing fraud to get ahead = BAD.

Get the latter out of your head. Long run, it is not the way to get ahead.

Potential way you can do this is get a credit line, possibly a credit line against your current house (HELOC). Another option is a private lender for the down payment. However most banks don't like the idea of the down payment being borrowed funds.

There are many strategies for buying with low or no down payment. @Brandon Turner wrote a book about it, available under the bookstore tab above.