Investment Property Less than 20% Down

[Bill Schollmeyer]

Hi All,

Forgive me for the fairly redundant question (I've read the other forums on this subject) but I want to get some opinions on how to purchase a specific 4-family property without putting down 25%, which would be $97,500 on a $390,000 purchase price. 

The most obvious answer is probably FHA loan and house hack - however, I'm currently doing that exact thing with a 3-family property I purchased last year. Alas, I likely couldn't get a second FHA loan without meeting the special exceptions requirements. I would normally just save up the money to do the 25% down payment, but this is a family friend selling who wants to sell within a few months, so I won't be able to save up $97,500 by then.

Here's the interesting part - the seller owns the house free and clear - BUT DOESN'T HAVE ANY INTEREST IN SELLER FINANCING. I even showed him how much more money he would make if he carried a 20-year note and I put down 10%. I explained how he was basically getting a guaranteed annuity backed up by the property. However, he wants to use the proceeds of the sale to buy additional properties closer to where he is retiring, so I can't fault him.

Any creative solutions on how to purchase this property? One crazy idea I had was to do seller financing and have a third party agree to purchase the note from the seller upon closing, essentially circumventing a traditional mortgage company. Haven't researched this though - probably illegal and tough to find someone to fork over $350,000+ for a note.

Thank you in advance to any suggestions you may have!!!