Downpayment for Multi-Family

7 Replies

Alright guys so I'm looking at a couple of properties, and I'm liking the numbers. My question to you guys is since I am just starting out, I don't have all the money to pay for the down-payment of the property. I want to know the strategy for you guys to find away of negotiating the down-payment on the property. As in Roll it in to a monthly payment for them and pay it off slowly. Could I possibly do that? How would you approach this method? 

@Luis Cruz you can ask the seller to carry back the down payment, but you have to give them something in return. What is in it for them? Higher sale price, interest, short term, etc. If you are using a traditional lender, this is non-negotiable. You need to find a partner that has some money to go in with you. Again, you will have to give up something. Equity, Interest, etc. Nobody rides for free.

@Anthony Dooley

I couldn't have said it better myself. Nobody rides for free.

I know its an exciting time for you. You are on the BP blogs reading on all the advice. You are on the forums and reading people's success and failures and you are just ready to dive headfirst into this thing called REI. But just know, I lot of these people did not just started buying properties overnight.

Many of them made some sacrifices to build up capital to invest with. Sell their car, eat ramen noodles for months, did side hustles or tap into their retirement fund. There is no easy way of doing this, if it was, everyone would be doing it.

Build up your capital first then start looking at properties.

Another thing, even if you find a partner who can put in the capital, do you think he/she will be willing to gamble their money with a newbie?

@Brian Adzadi They will if they recognize the benefit of the investment and they believe in the deal. It has to be worth the risk, which is why the "newbie" must be willing to give up some, and maybe all of the upside in order to do a deal. If it works out, then the private money lender/partner will be willing to do another deal for less of a cut.

Thank you for the reply, honestly really appreciate it.

It's definitely much easier to make the numbers work when it's mostly someone else's money on the line. So as the others have said, an owner financed deal might be a good way to go about it. You could offer a smaller down payment and get a couple year owner finance at higher interest to buy yourself some time to save up. It might be a long shot, but you could see if the seller is willing to do a lease option.

Otherwise, a partner might be the only way to go. 

@Christopher Veljkovic as I said before, you have to give them something they want, otherwise they will want all the money at the closing. There are 1000 ways to structure it. You want owner financing, so you have to be willing to give the seller something that the other buyers will not such as a higher price, a higher interest rate on their money, a large down payment, etc. otherwise they will just wait for a qualified buyer.

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