25% down for a duplex?

Question

I was seeking pre-qualification on a fixed rate from a local broker, and he is telling me if I purchase personally (vs. LLC), I will need 25% down for a duplex, triplex or quad.  Does this sound right?

Joshua Fulenwider · Answer

25% is a fairly consistent number.  As you establish yourself with more properties and continue to network you may find lenders that will do 20% or even 15% down.  They are rare but not uncommon.  The company I work for will go to 15% but our standards are pretty strict.  In fact, while we have it as an option I have not yet approved anybody at this low of a down payment.   In order to get considered for such a low down payment you have to qualify as an A+ borrower, the property needs to have more than the 15% equity in it, and we want you to move your business accounts to us to name just a few.

Len Roche · Answer

Yeah that is correct. Like Andrew says portfolio lenders will have the option for a 20% down payment but with a higher interest rate. My lender charges 0.25% more for 20% down compared to 25%. Factor both scenarios into your property calculator to see which one works with your investing goals.

Andrew Postell · Answer

@Christopher T. yes, a conventional loan will require 25% down minimum on a multi-family investor property.  You MIGHT be able to find a portfolio loan with 20% down but you'll pay a significantly higher rate or some other feature that you won't like to get that different down payment.  Hope this helps.

Jeff B. · Answer

Owner Occupied get better LTVs, but not investment properties.

Christopher T. · Answer

Thanks Rohan!