First time multi family rental buyer looking for financing idea

Upstate New York, New York
Private Lending & Conventional Mortgage Advice
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First time multi family rental buyer looking for financing idea

Clarens D. Philippe
Member since 2023 · 2 posts · 1 vote

Hi - 


Hope all is well with everyone! I’m am a first time home buyer. Under contract looking to purchase a multi family rental in upstate NY. I can’t house hack and make it a owner occupied rental so all my options are looking like 20-25% down. Was curious if anyone knew alternative financing methods that I could put down 15%. Think it’s a great opportunity and trying to expo more all avenues available. Thank you in advance! 

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Benjamin AakerPro Member
Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
3y
You could ask the seller to finance a portion of the deal. Just enough to get you to 15% in. Multifamily sellers are more experienced and likely to offer seller financing.
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  • Sanat Bhandari
    Investor · Omaha, NE · Member since 2021 · 244 posts · 163 votes
    3y

    @Clarens D. Philippe If house hacking isn't an option, some ways to put 15% down are (in no particular order and assuming closing in an LLC):

    - Partner up with an equity investor where they bring 5-10% of the purchase price to the closing table. Since you're willing to put up 15% of the purchase, you can give them a much smaller piece of the pie (maybe 25%) 

    - Partner up with a debt investor where they bring 5-10% of the purchase price. You may have to season those funds for 60 days before using them for downpayment

    - Seasoned gift funds from your close relatives with no expectation/enforcement of repayment

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  • Benjamin AakerPro Member
    Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
    3y
    You could ask the seller to finance a portion of the deal. Just enough to get you to 15% in. Multifamily sellers are more experienced and likely to offer seller financing.
    2Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
    3y
    Quote from @Clarens D. Philippe:

    Hi - 


    Hope all is well with everyone! I’m am a first time home buyer. Under contract looking to purchase a multi family rental in upstate NY. I can’t house hack and make it an owner occupied rental so all my options are looking like 20-25% down. Was curious if anyone knew alternative financing methods that I could put down 15%. Think it’s a great opportunity and trying to expo more all avenues available. Thank you in advance! 

    Sounds like your best bet is DSCR if investment. Feel free to message me directly for questions
    [email protected]860-538-3672
    ProAlpha Capital56 Reviews
    WebsiteView Page
    1Reply
  • Lawrence Potts
    Real Estate Agent · Member since 2018 · 459 posts · 414 votes
    3y

    Lots of good answers here.

    Going Seller carry is an easy way to go. The mortgage lender is going to want to know about that though, they'll have to factor that into your DTI.

    Finding a partner would be great too, but you’d need to be clear about what they’re getting in return and what value you are providing to them in the mean time until they get paid out.

    DSCR might be complicated because now you're dealing with two different loan servicers that may both want 1st lien position? I may be wrong so I'd be curious if anyone had an answer!

    Hope that helps!

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
    Quote from @Clarens D. Philippe:

    Hi - 


    Hope all is well with everyone! I’m am a first time home buyer. Under contract looking to purchase a multi family rental in upstate NY. I can’t house hack and make it a owner occupied rental so all my options are looking like 20-25% down. Was curious if anyone knew alternative financing methods that I could put down 15%. Think it’s a great opportunity and trying to expo more all avenues available. Thank you in advance! 


    You might want to negotiate 15% seller financing and do a 70% LTV hedge fund loan. If the property needs rehab and it is a 1-4 unit there are lenders that can do 10% down on a fix and flip

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Clarens D. Philippe
    OP
    Member since 2023 · 2 posts · 1 vote
    3y

    Thank you for all the suggestions everyone! Does anyone have a lender for a DSCR in the NY area that'd allow 15%? Was looking into a bridge loan that can be converted into a DSCR after a certain period. Not sure if that method is worthwhile. Anyone have opinions?

    0Reply
  • Trevor Naumann
    Real Estate Agent · NY · Member since 2022 · 111 posts · 48 votes
    3y
    Quote from @Clarens D. Philippe:

    Thank you for all the suggestions everyone! Does anyone have a lender for a DSCR in the NY area that'd allow 15%? Was looking into a bridge loan that can be converted into a DSCR after a certain period. Not sure if that method is worthwhile. Anyone have opinions?

    Where in NY?  
    I would try Stephen Betterton  prime lending 

    845-762-5246

    If he cant he very likely will know somebody who can 

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