Multifamily Building Financing w/ Low(er) Down Payment Options?

Question

I'm currently doing some due diligence on a large(r) apartment building that I'm seriously considering buying. The main stumbling block is that my lender for all my other multifamily (most of my buildings are 8 - 22 units) requires 20%+ down payment which has not been a problem thus far but for this deal (~ $4m range), it's a bit steep.

I'm an individual investor and don't have 'partners' to share the risk with.

What are some options out there for financing such a deal with say 10% down?

Thanks in advance.

I'm an individual investor and don't have 'partners' to share the risk with.

What are some options out there for financing such a deal with say 10% down?

Thanks in advance.

Ricardo Louis · Answer

I am in a similar situation myself. I’d love to partner on a deal, if it makes sense obviously. Scouting the Midwest to Southeast region right now

Nick B. · Answer

Owner financing could be an option if the seller has no mortgage on that property.

Spencer Gray · Answer

You may be under the minimum loan amount but for anyone interested I would look up HUD223(f) .

Rudy Bello · Answer

@Vasundhara Ranjani, Which lender is lending at 20% down for 5 or more units? can't seem to find any.

Athan Seyler · Answer

Could you liquidate the other 10% with business credit cards? Then there's the down payment and you may be able to apply for credit card that could have a low rate on the balance or 0% balance transfer. I have no experience but looking at strategies to get in and I've heard of some doing similar tactics; then refinancing after more of the equity has been paid down.

Keith Dang · Answer

You may try to see if you can get a renovation loan from a bank or lender with a lower down payment. I have seen loans with 15% down (assumes the proforma numbers as renovated will satisfy the lender's underwriting) but not too many 10% down loans from a bank.

Keith Dang · Answer

You may try to see if you can get a renovation loan from a bank or lender with a lower down payment. I have seen loans with 15% down (assumes the proforma numbers as renovated will satisfy the lender's underwriting) but not too many 10% down loans from a bank.

Benjamin Aaker · Answer

As @Nick B.says, Seller financing is one way to do this. You may be able to assume a mortgage that exists. It's more likely to be able to assume in the commercial field than residential. Another option is to find a partner to help with the down payment.

Brian Plajer · Answer

I logged on to ask a similar question wondering how commercial financing requirements differ from residential. I would have assumed a lower % at a higher rate. I'll watch this thread for more info.

Multifamily Building Financing w/ Low(er) Down Payment Options?

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