Rental Property Investor · Houston, TX · Member since 2020 · 9 posts · 1 vote
Hi all,
My wife and I recently closed on our home back in March. I’ve been saving aggressively to buy a multi-family since, but I was wondering if anyone had some creative strategies to take advantage of some of the loan programs so that I don’t need so much upfront. I know, I know, I should’ve bought the multi-family first, but the home we bought was a steal, so I couldn’t give it up. I welcome any and all suggestions. Thanks for your help!
There are multiple creative path depending on what the details of your situation are. For instance,
- How much of a steal was the home?
- Did you put 20% down or 0-3% down ?
- Are you able to use your savings to throw in some value add so you can refinance and pull some equity out?
To mention a few.
With that being said, if you are able to find another multifamily steal, you wouldn't have that much of a problem raising capital or coming up with creative finance strategies. Here are a couple of pointers to help get your brain storming started;
1.) Partner with a BP Member (preferably one in your area): It's a seller's market right now and presumably there is a lot of investor money floating around. It's okay to split equity just to get your feet wet and move on to the next deal. Caveat:Always do your due diligence before you partner with anybody.
2.) House hack: The barrier to entry is low when you use the FHA financing . You will only have to put down 3% and sometimes if you find a beat down property, they will fund the repair cost up to a certain amount . Do some research. - FHA 203(b)
3.) Vacation rental products: Some banks are buying into the short term vacation rental action so long as the prospective property is miles away from your home of residence. Talk to a couple of small banks around your area.
4.) Seller finance: Understand seller financing and pitch benefits to the seller, You can also do a lease to purchase. Depending on the seller's condition, it may be a win win for both you and the seller.
I am certain they are other creative finance options available that I must have missed, It may help some more if you connect with some of the investors in your area(via BP or your local meet up).
@Mason Hickman plan was to use it as an investment property. So it sounds like I’m stuck with the 25% down?
You should be able to get something for 20% down conventional. As some of the other posters mentioned, you can do creative things to reduce “your” overall down payment or to get cash back. The way I read your question with the phrase “loan programs” was thinking you weee asking more about traditional financing options with lower down payments.
There are multiple creative path depending on what the details of your situation are. For instance,
- How much of a steal was the home?
- Did you put 20% down or 0-3% down ?
- Are you able to use your savings to throw in some value add so you can refinance and pull some equity out?
To mention a few.
With that being said, if you are able to find another multifamily steal, you wouldn't have that much of a problem raising capital or coming up with creative finance strategies. Here are a couple of pointers to help get your brain storming started;
1.) Partner with a BP Member (preferably one in your area): It's a seller's market right now and presumably there is a lot of investor money floating around. It's okay to split equity just to get your feet wet and move on to the next deal. Caveat:Always do your due diligence before you partner with anybody.
2.) House hack: The barrier to entry is low when you use the FHA financing . You will only have to put down 3% and sometimes if you find a beat down property, they will fund the repair cost up to a certain amount . Do some research. - FHA 203(b)
3.) Vacation rental products: Some banks are buying into the short term vacation rental action so long as the prospective property is miles away from your home of residence. Talk to a couple of small banks around your area.
4.) Seller finance: Understand seller financing and pitch benefits to the seller, You can also do a lease to purchase. Depending on the seller's condition, it may be a win win for both you and the seller.
I am certain they are other creative finance options available that I must have missed, It may help some more if you connect with some of the investors in your area(via BP or your local meet up).