Creative No Money Down Option for Tri-plex

[Jason Varney]

Hi all,

I have a good tri-plex opportunity for approximately 350k where i could put about 30K into it and have it rents totaling about $4500. I can get a DSCR loan but need 20% down and about 30k for rehab. I dont have any cash to throw into the deal. What are some creative ways I can come up with the down payment and rehab money? Partner with someone on the down payment in exchange for equity in the deal? Should I try to find private money to fund the whole amount and refinance in a year? What do you suggest as some good options for me in this situation? Thanks!

[Carlos Valencia]

Hi Jason, 

Yes you can use hard money but you will also need 20-25% down plus 6-12 months reserves depending on experience. Your rate will also be high and maybe 2-3 points cost. If your new it can be very expensive. Many DSCR loans don't allow for gift funds as its meant for investment properties so that can be a challenge when it comes to finding partners to help you fund this deal. You would have to season the money in your account or have them be on the loan with you. If the rehab isn't that extensive meaning you can live in the triplex you can also try financing as conventional if you qualify as you would only need 5% down. This way you can live in one unit and rehab slowly and not having to rush as you have a locked rate unlike when using hard money its only typically good for 12 months depending on your terms. Once you complete your rehab you can move out and rent out that last unit. Rinse and repeat.

@Albert Bui @Matthew Kwan