Down Payment on 2-4 units Multi Family

7 Replies

Hello fellow BP fans,

I'm looking for the least amount of down payment on a non-owner occupied 2-4 unit multi family. I spoke to lenders who require 20%, 25%, 30%.

- Aside from owner financing, what are some ways I can decrease DP amount?

- What are typical terms on private lending for these properties?

Thanks for your advice.

@Hilde M. L. if you're talking about private lenders that you don't know then what you are actually talking about is a hard money lender. Hard money lenders usually require about 30% down and generally don't lend on buy and holds anyway. If you're talking about private money lenders that you know then you can negotiate whatever you want with them. You should start by asking them. 

There are no programs that allow less than 20% down on 2-4 unit purchases unless you are asking for an FHA loan for a primary residence. US Bank has a 10% down product for 2-unit primary residence purchases, but that is about as aggressive as you'll get on anything that isn't FHA.

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@Hilde M. L. , can we take it that you're already buying your primary? Any loanable-equity in it yet? A HELOC would be a good deposit source in that case.

Not enough equity yet? Well, there's very good reasons why it's hard to find other options!...

- Is it advisable to deal with private or conventional lenders who are local in my area? Or do you have good experience with lenders online as well? A lawyer advised me once to deal with local lenders.

- Also, do loans with private lenders appear on my credit report? I haven't done private loans but will be researching these more.

Thanks for your advice. :)