Is it possible to get multifamily property for less than 20% down in this market?

3, 4 or 5 plex.
In Buying Property - Asked by Paul P. - Feb 1, 2011
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Answer(s)

Chris D.
Broker/Agent
Decatur, IL

Of course it is possible. You can take out a line of credit and use that for a down payment on a mortgage. You can also have the owner carry back a second mortgage for the down payment. Buying contract for deed is another way. If you are using 100% financing on anything you had better make sure you know the property and the market like the back of your hand. This is how many first time investors get into trouble it they fantasize about how much money they are going to make and will do anything to make a purchase. Don't forget to figure in reserves and vacancy in your calculations.
Good luck

Feb 1, 2011
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Alex L.
Developer
San Diego, CA

You need to define your question better. You are asking about multifamily 3, 4, or 5 plex. 3 & 4 fall under residential financing, which means that you can actually buy them with 3.5% downpayment if you qualify for FHA owner occ financing, or you can buy them with 20% conventional financing as an investor, again if you have full-doc app.
5 and more units fall under commercial financing, and you will need at least 25-30% down depending on many factors that your lender will consider, unless you know how to be creative with seller participation, mez financing, bring in a money partner or equity share agreement, os something along those lines.

Feb 1, 2011
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