I see posts on occasion where investors cite obtaining 5% down payment loans with low fixed rates at 30yrs. Who is providing these loan products to you? So far I am finding that no bank in my area is willing to lend to me for any less than 20% down. And even if I could get a loan for less than 20% down, the margins are tight enough right now in my area that PMI would eat into profit margin by way too much for it to be worth it.
Any insight? What am I missing? I could buy multiple properties if I were able to spread what I’ve saved into multiple loans with lower down payments.
Hi @Michael A., have you considered "house hacking" and picking up a property with an FHA loan? Can be a SFH, or a 2-4 MFH.
With an FHA 203k loan, you can put 3.5% down and finance the house and renovations.
After it's complete, if you've bought a good deal, you can refinance into a traditional 30 year mortgage because the ARV should be enough to keep you from having to pay PMI.
Then after you've lived there for a year, you can sell it.
FHA loans are a bit onerous, but could get you started on the right path.
Just a thought.
@Michael A. Most of the references to 3.5% - 5% down payments are for owner occupied properties.