Funding Multi-Family Investment

[Desiree Claudio]

I am looking into purchasing multiple Multi-Family homes and plan to rent out the units. My concern is the money down. Will private lenders lend the money with no downpayment and higher interest rates? And if so what are the usual requirements for such a loan? 

[Roger Vi]

Yes it is possible they will loan you money with nothing down.

However, they will always need you to bring something to the table. Anybody can say they will make money if they could borrow it but lenders only work with people that they believe are highly unlikely to default or even be late on a single payment.

One way to see who will make the payments is a downpayment. If you can't bring a downpayment, the only way I could see a lender working with you is if you had a track record of paying back loans and making money on multi-families.

I guess another reason a lender would work with you is if he/she were desperate for a buyer. This usually means the property couldn't sell otherwise. Don't expect lenders to just hand out high interest loans to risky buyers. At 0% down you have no collateral and could run away the day after the loan is made.

Short answer, yes they will loan. Focus on what you can bring to the table. If you are a beginner, this might be difficult unless you have relatives with money. Find a way to create a track record for yourself that will separate you from the billions of other people that want loans with no downpayment.

I also want to mention that I am by no means an expert but as far as I know these are the only ways a lender would work with you. The best thing you could do is find some local lenders and just ask. This won't cost you a dollar and the answer you get will be definite because they are the ones with the money.

Good luck!