Falling short on down-payment for 4-unit rental property

[Nitin Dhiman]

Hello experts,

I've come across a 4-unit (3/2, 2/1, Studio, and converted garage) property in San Diego that cash flows extremely well. Unfortunately, in California a 4-unit purchase needs 25% down.

- Any lenders out there who finance a 4-unit investment property for 15-20% down?

- Another question I have is - how do lenders determine the number of units? This property is a 3/2, 2/1, Studio, and converted garage. I don't think all the units are permitted. If it gets treated as a 2-unit I could finance it for 20% down.

Thanks!

Nitin

[Chris Mason]

Originally posted by @Nitin Dhiman:

Hello experts,

- Any lenders out there who finance a 4-unit investment property for 15-20% down?

We will only do the same 75% LTV as everyone else, but you can bridge the gap using borrowed funds from another source, provided those borrowed funds are secured by real estate other than the subject property. 

As long as you aren't asking us to go over 75%, we're fairly flexible. So you could do...

75% LTV / 15% borrowed / 10% down.