Buyer with 5% down for investment 3plex

[Charlie MacPherson]

I'm a Realtor just south of Boston and have a client who has identified a 3 pled that looks attractive.  He will not owner occupy so lenders are requiring 20% down.  He has 5% and is looking for alternative financing. I've advised him to find a portfolio lender, but I'm not optimistic.

Any other suggestions?

Thanks in advance.

-Charlie

[Shaun Reilly]

Don't see this happening with any institutional loan.

Things like portfolio lenders tend to be good in that they will look at the deal and the actual numbers and history of the borrower rather than have their head jammed up Fannie's a$$.

However you probably have to put down as much, or likely MORE than with a conventional loan.  That's the price of the flexibility.

If the place is substantially undervalued a really flexible small bank MIGHT go off of value rather than price, so if you are getting a screaming deal with like 20+% instant equity they could possibly go for just 5% out of pocket.

Really the same thing if it is a junker and you did the Hard Money/Fix/Refi route. A HML will want 25-35% of purchase price unless it is a crazy good deal too.

What he needs is some friend or family member that has a few hundred grand in cash to make them a middle length term loan at like 6-8% then refi to a conventional loan once he has 20% equity.  My guess is that he doesn't have a bunch of these to choose from.

Honestly if he must have this place and only has 5% move in for a year.