How to fund deal

[Michael Behr]

Hello, 

I found a multi unit property. I have about 20% down payment. I’m now being told it will likely be 25%. My credit score is 780+. What’s the best way to fund this deal? I’d like to use as little as my money as possible

230k purchase price

45k is what I have to put down(don’t want to use all this)

[Dennis Muno]

Quote from @Michael Behr:

Hello, 

I found a multi unit property. I have about 20% down payment. I’m now being told it will likely be 25%. My credit score is 780+. What’s the best way to fund this deal? I’d like to use as little as my money as possible

230k purchase price

45k is what I have to put down(don’t want to use all this)

 Hello Michael,

It depends on what you are trying to do. Also don't forget you'll need money for closing costs in addition to a purchase downpayment.

Questions:

Does the property need rehab? Then you'll need hard money or bridge. Some lenders will lend up to 90% purchase and 100% rehab.

Is the property in good condition? You could use a DSCR loan. No personal income needed. Your FICO will be checked. Rents will need to cover PITIA(principal, interest, taxes, insurance, HOA).

For DSCR most lenders require 20% down+closing costs. However, some lenders require 25% down for a first time investor.

Do you already have an FHA loan? If not, you could try an FHA loan(minimum 3.5% downpayment) and buy a multifamily(1-4 unit). You stay in one unit(you are required to for a year), rent the rest of the units out and then use the tenant's monthly rent to cover the mortgage payments.

If you have 45K I won't recommend you using all that if not necessary. You never know what will come up after you buy. Life happens.