How can I finance properties under $50,000

8 Replies

Hi Guys,

I'm 27 years old and I finally saved up $50,000 to begin investing - I wanted to use this cash for multiple down payments on a few rental properties. I'm from Miami, FL but I'm interested in buying out of state.I found a neighborhood in Memphis, TN that I really like, and I found a couple properties that I'm very interested in acquiring - both properties are under $40,000. 

I've been told that it's difficult to get conventional financing for a property under $50,000. I was wondering if it would be possible to acquire both properties using a hard money lender, and then do a cash out refinance on both properties at once since technically it would be an $80,000 portfolio.

Do you guys think banks would be willing to do a cash on refinance on two deals worth 80K combined?

Does anyone have another creative suggestion for buying deals under 50K or know if it's possible to get a conventional loan for deals like this?

Thanks!

Curtis


Conventional financing is possible.  I have a loan that originated in 2017 for $30K.  I would refer the bank, but they have recently been bought by a larger bank, so I'm not sure the new bank originates loans of that size.  Conventional loans under $50K are not common, but they exist.   I would search smaller local and regional banks as well as credit unions in your area.  

@Curtis Chavoustie Have you tried seller-financing ?  That's how I acquired my first two rental properties.  It can be "sold" to the seller by saying things like " How would you like to stay diversified and in real estate without having to deal with the headaches of landlording " etc. etc.

In order for me to secure financing for a property under $50,000, I had to call twenty different banks.  Finally found a local bank in my area that would finance it.  You just got to put in the time and hustle and you will find one. Good luck!

@Curtis Chavoustie Are they worth over 50 after renovation? If so you should read up on the BRRRR strategy, I recommend buying David Greene's book but all the info is available for free between posts and the forums as well. You could do the initial acquisition with hard money but I would call mortgage lenders and make sure you qualify to refinance out when the time comes

@Curtis Chavoustie

Try a small bank. I recently connected with a small 3 branch bank that did a 60k cash out and 48k mortgage for me. Went thru their commercial loan guy. Super easy..