If you work with a local lender a lot of times they won't care where you get the money for down payment, although that may be changing in some banks. Just find a different one then, but the basic idea is open a secured line of credit, or lien on another property to get the funds for down payment, then buy the property (make sure it cashflows positive including your borrowed funds for down payment), then you can refinance shortly afterward to pay off your line of credit. The key is to ensure you are buying right (enough of a discount) so that the property will appraise later when you go to refinance. Sometimes you may have to prove that you have improved the property in order to justify a higher appraised value, but the income approach to value is dominant in multifamilies and alot of commercial properties. Hope this helps. Jim C.
Jan 7, 2009