How to buy non-primary residence single family homes @ 100% LTV

Question

I am a beginner in real estate and looking to scale a portfolio as fast as possible. How do I buy single family homes that I will not reside in for 100% LTV or anything close to that? I have heard of folks getting 95% or 100% LTV for non owner occupied houses. Where are they doing this at? I know that all banks even most community level banks (I have spoken to most in my region already) will not offer this type of financing due to the fact they have to abide by Fannie/Freddie lending standards. Are there any credit unions that will allow for this or other lending institutions that do not need to follow the Fannie/Freddie lending guidelines? I have created various financial models looking at renting or lease optioning properties that have 100% LTV debt against them and they are still very cash flow positive I just need financing.

Again I am looking to utilize these for NON owner occupied single family housing. I already have access to 100% LTV on an owner occupied single family. Any advice would be appreciated!

Ned Carey · Answer

Account Closed welcome to BP. I see this is your first post.

I don't know of any traditional lenders like banks that will loan 100% on non owner occupied property. The exception would be private lenders. By and large private lenders or hard money lenders do not want to loan for longer terms. This doesn't work very well for buy and hold.

I would ask the people who are telling you they are getting 100% financing, where are they getting it? Any one pushing 100% financing is likely to be a scam.

Marsha Rost · Answer

@Bruce Wayne

Maybe what you're thinking of is people who renovate and add value and then refinance to get 100% of their invested cash back. For example if purchase price plus renovation and holding/closing costs add up to 80k and the property is appraised at 100k then after refinancing with 20% down you get 80k back then you have 100% of your invested capital back. Not necessarily 100% LTV.

David Hooper · Answer

Account Closed, as previously stated, I think the rehab / refinance strategy is the most likely way to essentially get 100% financing. You can do a Fannie Mae HomeStyle loan, buy a place for 85% LTV -- combined purchase and rehab costs. Find the right place and do the right rehab, and you'll create equity as soon as the project is complete. Assuming you're able to create enough equity, you can cash-out and get your initial 85% back. Example: Buy a fixer-upper for $200KRehab costs: $50KARV: $325K New cash-out loan: $260KHard to find those properties, but I've heard of it happening as I've increased my exposure to the HomeStyle program.

Ned Carey · Answer

Account Closed I don't know of a single traditional lender that will do a 100% loan. However i have not done a lot of looking as  most of my properties are self financed or private lenders.  I do network with a lot of lenders and they say the same thing.

Account Closed · Answer

@Matthew Perry thanks Matt I have been thinking of this strategy for a multi family with an FHA. The credit union I am a member of also gives out 100% LTV for owner occupied single families.

@Ned Carey Is that true in your experience? Not even small credit unions that portfolio the loans would give out something like this? What is the highest LTV you have seen on a single family non-primary residence scenario like this? I will definitely ask the person I know who mentioned it to me. Somebody else on one of these forums mentioned he does it with a credit union but since I am new and unfamiliar with how this site works I am not sure how to loop in a new person to this conversation.

My goal is to get small 3 bedroom homes move in ready and lease option them and then roll into the next house with same parameters on another lease option with the down payment.... and the cycle continues.

Matthew Perry · Answer

Not that I am aware of unless you are a Veteran or a Native American who's tribe offers a special mortgage program. But Good luck. Meanwhile maybe consider saving up 3 percent and owner occupying something for a year. Then buy a new one, and move out and you'll have the rental then. :)

How to buy non-primary residence single family homes @ 100% LTV

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