Multi-Family Financing

[Jesse Young]

Hi Everyone,

I am looking into multi-family units in the Washington area but have no cash for a down payment and do not want to live in it either. I see many articles talking about getting private money and hard money lenders but dont really know how or where to find these resources. Any insight would be much appreciated.

[Mike Sumsky]

Jesse, since it appears that you're looking to hold these long-term and don't have any money for a down payment, you can cross hard money off the list.  The interest rates will be too high for you to get a cash flow, and these are typically short term loans anyway.  

You absolutely can finance these deals 100% with private money. Most people start with their inner sphere (family, friends of family, acquaintances) that have money saved up and either want a better return than they can get from a CD or money market account, or something that is more secure and predictable than the stock market. They may have a bunch of money in an IRA that can be converted into a self-directed IRA which can then be used for real estate investing. Your job is to find great deals with both sufficient equity and sufficient positive cash flow to create good security for your lender and yourself, and start flapping your lips so people know that you're an investor and you work with private lenders.

Of course there's the legal side of working with private lenders that you'll need to be aware of, you'll probably find several articles and forum posts that will go into more depth on this topic.  Good luck!!