Down Payment Based on Appraisal Vs Purchase

[Aaron Henricksen]

I am looking at a property that looks good and the math works, but it's a little more expensive than the last few properties I've looked at, and  although I have enough available for a 20% down payment, I'm hesitant to tie up most of my liquid cash into one deal, especially if the market might be getting soft soon and there might be good opportunities on the horizon. Another relevant piece of information is that the purchase price that I would be offering would be 80-85% of what I believe it will appraise for.

I know conventional loans, or anything that will have government backing or be sold on the secondary market, will almost certainly require a 20% down payment for an investment property. I also know that there are hard money lenders that have their own criteria and may require less down, but does anyone know of any options or lenders, that will give a decent interest rate with a down payment based on 20% equity instead of 20% of the purchase price? For example, in the case of this house, if the purchase price is 85% of the appraised value, does anyone know of a specific lender (that doesn't charge hard money rates) that would allow me to put in 5% of the appraised value to get to the 80% equity requirement, instead of requiring 20% down?

If not, the other option would be to purchase it and refinance it based on the higher appraised value after it's seasoned, but I wanted to save the time, effort, and closing costs of the refinance if possible.