China, ME · Member since 2014 · 3k+ posts · 4k+ votes
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.
Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
11y
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$$.
However you probably have to put down as much, or likely MORE than with a conventional loan. That's the price of the flexibility.
If the place is substantially undervalued a really flexible small bank MIGHT go off of value rather than price, so if you are getting a screaming deal with like 20+% instant equity they could possibly go for just 5% out of pocket.
Really the same thing if it is a junker and you did the Hard Money/Fix/Refi route. A HML will want 25-35% of purchase price unless it is a crazy good deal too.
What he needs is some friend or family member that has a few hundred grand in cash to make them a middle length term loan at like 6-8% then refi to a conventional loan once he has 20% equity. My guess is that he doesn't have a bunch of these to choose from.
Honestly if he must have this place and only has 5% move in for a year.
Commercial Real Estate Broker · North Shore, MA · Member since 2013 · 56 posts · 17 votes
11y
HI Charlie,
If your client could get 10% down he might be able to get funded through [REMOVED]. We have a similar situation with one of our clients and [REMOVED] was able to get it done. Best of luck!
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
11y
Sorry, but if you're looking for names of lenders you will need to post in the Marketplace.
Portfolio lenders are going to require similar down payment to conventional. Some sort of partial or full seller financing would be the best route to a low down situation.
If the place needs work, buying with hard money, fixing, renting, and refinancing might work. But that's an expensive route.
Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
11y
Don't see this happening with any institutional loan.
Things like portfolio lenders tend to be good in that they will look at the deal and the actual numbers and history of the borrower rather than have their head jammed up Fannie's a$$.
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.