Conventional or Commercial - Lending Question

[Andrew Simms]

Hi BP Community! I am getting started and had a few questions regarding financing. My initial plan was to BRRRR a SFH using a HELOC on my primary residence (roughly $100k in accessible funds). My plan was to fund the purchase and rehab entirely with the 100k (although I do have some other funds that could be used); however, after looking at the numbers and my plan to scale, I am thinking that a small multifamily property may be the best way to start (2-4 units). This would not be an owner occupied property. With that said, I would be looking at higher priced properties and plan to use HELOC for downpayment. 

My local credit union indicated that FANNIE MAE does not allow lending on properties requiring repairs. I have reached out to the lender to get some clarification on what that means. He says they lend on investment properties all the time, so I cannot imagine that all these investment properties require no repairs of any kind. 

My question:

• What other lending options do I have to get into a conventional 20-25% down deal? I know there is commercial loans but a lot of those require business experience (which I have none to date). 

Thanks everyone!

[Mike Burkett]

@Andrew Simms  If the property only needs cosmetic work and you want to pay that out of your own pocke, you can get a Fannie Mae investment loan.  If it need more substantial updating that may take some time to complete, you are probably better off buying the property with a hard money loan, fixing the property, leasing it up, then refinancing into the Fannie Mae loan after 6 months.