How the heck do you buy something with little to no money down???

[Gerry Tenebruso]

Hi all, Tomorrow I'm closing on a duplex that I had to put 25% down on totaling $40k. The house has positive equity from the start and with a few repairs will be able to refinance in about 6 months for all if not most of my money down. How could I have done better to finance this with as little skin in the game at the very beginning to be able to employ my capital somewhere else for the next deal immediately to grow my portfolio? Thanks so much in advance for the help, Gerry

[Sean Blomquist]

@Gerry Tenebruso the way people do it with little to no money down, is different than the scenario you went with.

Biggest key is buying a property that does need some work to get it up to par.  Doesn't have to be a complete disaster, but it really can't be turn key.  You buy it using a hard money lender that requires little to no money down if the deal is strong enough.  Use their money to rehab it, then once the rehab is done you do a rate and term refinance with a direct to Fannie Mae lender.  There is no seasoning required that way. 

If the deal was strong enough to require no money down on the front end, then the refi lender may be able to cover their closing costs on the back end as well.

This is a much more powerful strategy to picking up rentals vs having to save 25% down for every property and then wait for it to season so you can do a cash out refi.

Good luck!