What are the ways to reduce putting down payment amount?

Question

What are the ways to reduce putting down payment amount less than 25% for multifamily buildings with 6+ units?

Is there anyway putting only 5%-10%? If so, how?

Bob S. · Answer

No,

Cam Schwartz · Answer

Hi Amanuel,

This depends on your strategy but if you are looking to purchase and rehab to add-value before either (i) flipping or (ii) refinancing, you can likely find a product for 15-20% down, perhaps 10% if you're creating enough value. For example, we can do as low as 15% down on multifamily bridge loans.

If you plan to refinance you will likely need to keep at least 20% equity in the property if not more, though if you're creating value through a rehab, you may be able to pull out all of your initial down payment and more.

Bob S. · Answer

NO, ,

Jose Jacob · Answer

The answer is NO.  Lenders will not take a risk of 90-95% on your deal.  Deal like this need at least 25 to 30% plus closing costs. If the unit need any repairs, you may have to come up with that also. If you can plan accordingly and raise the rent (if it is possible) you can refinance after 2 to 3 years and  can pull back your down payment after refinancing by either raising the rent or property appreciation. Most investors keep 30-50% equity in units in case if they have to face a downward trend in the future.

Erik Estrada · Answer

You will need to partner up with some one on a deal. MFH 6+ units will require a higher downpayment compared to 1-4 Units

Andrew Zamboroski · Answer

As said by Mike, finding a partner could be a great option. You could also look to raise capital from family or friends as a good start.

Jacob Sherman · Answer

unfortunately in the investment world you'll be more in the 25% range consistently

What are the ways to reduce putting down payment amount?

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