Mandatory 15% down for multi-unit property in NJ??

6 Replies

Hello All,

I am looking to purchase my first investment rental property in NJ. I am looking at both single and multi unit properties. A friend of mine who is a mortgage consultant, states that a minimum down payment of 15% is necessary for a multi-unit property (not sure if that only applies to NJ or not). He is the only mortgage/loan officer I have spoken with to date. I will definitely seek info/advice from other mortgage advisers but I figured I'd pose the question on BP for further insight. If 15% is not the mandatory minimum down payment, does anyone know any other creative finance options that may be available for purchasing multi-unit properties??

I apologize if I left out any pertinent information. I'm new here.

Thanks in advance...!

I have some friends that had 20% cash down, with a 10% seller carry, on a23unit complex. The local banks would not talk to them, no deal. Why? Because they had no history in the rental business, newbies. Now some can get a deal done even as newbies, but large multi families scare banks. much easier to buy a single family house. 

We owned 48 single family homes and several duplexes before we ran at a large complex.  It was still tough to get the deal done. We did get 70% bank, 20% seller, 10% me.  

@Todd Long  15% is nice - our guy wants 25% for multifam 20% for sfh investment props. 

I think with an FHA loan you can put 5% down for multifamily.

The lower downpayment options that are available from most lenders are for owner occupied properties. Any time you are non-owner occupied you will be looking at a much higher downpayment. There is no one number that is "mandatory" though, lenders use their own criteria. But 15% down is pretty darn good from a bank lender. Your best bet to get around that is to find a seller financed deal, if  you can.

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