All Forum Posts by: Maddy Lakshmanan

@Maddy Lakshmanan

It depends. Let’s say you are buying a $300k property but only have $15k to put down.

Market vakue goes down slightly and price drops to $285,000.

You think ok I am at zero equity. Wrong - you will have 7-10% costs to sell it so your $25,000 under water.

Tenants destroy place, you can’t sell, you can’t fix it up: what happens? Bank forecloses and sets you back 5-7 years

People don’t like to talk about this on BP but this happens a lot more than someone hitting it. Big in real estate.

@Maddy Lakshmanan That depends on the type of multifamily property. With a $40,000 downpayment and assuming your DTI permits, you should be able to get into a smaller multi using a 25% down conventional investment property loan

Some of the permanent financing loan types I recommend for multifamily investing (in no particular order):

- Portfolio loans through local banks/credit unions: They're generally at a 20 year amortization with a 5 year ARM but they can have some of the absolutely best terms out there

- Fannie/Freddie multifamily loans: Depending on the size (>$1m) and DSCR of the deal, these can be a great option with 30-year amortization and some of the best rates out there but they have fairly rigid qualifications

- DSCR loans through a broker: They also have 30-year amortizations but are more lax on qualifications than Fannie/Freddie loans

@Maddy Lakshmanan when you state "multi-family"...what do you mean exactly?  Are you talking about an 8 unit property?  An 80 unit property?  Can you share more on the type of property you were thinking about?

 you could look for owner financing but my recommendation is to wait . It sounds like you will really be leveraging and potentially being over-leveraged. In an economy where job losses are increasing and home values going down, being over leveraged is not something you want to get caught in.