Ideas for funding/financing multi-family properties!?

Question

Hello BP members! I am a Pittsburgh investor currently shopping for a new multifamily (2-4 unit) buy and hold. I have come upon a triplex, fully rented on 1 year leases and cash-flowing, that combined with operating expenses, project it in the 12-14 cap range. C neighborhood. I have some positives in my favor, but also some challenges, in getting it funded. I'm looking for suggestions. To quickly sum up my situation:
-I am a duplex owner, and therefore landlord experience.
-I have cash reserves, but not enough for a full 25%-30% conventional down payment on this property, and don't necessarily want to wipe out all my cash reserves on a big down payment
-I have excellent credit and have never missed a payment of any kind. I have no bad debt and keep my expenses very low.
-One of my main sources of income is as a waiter, therefore I do not have a strong W-2/Debt-to-Income- on paper.

I'm looking for solutions.  What type of loan products could be possible?  What type of alternative means of financing, possibly in combination?  Through research, some things that have come up are portfolio lenders, commercial loans, partnering, co-signers, Personal lines of credit, and creative financing.  All with some positives and yet drawbacks and obstacles.  I know a private lender would be ideal, but I don't know if I've built up enough of a track record yet to be able to convince someone to invest in me yet.  Tell me if I'm assuming wrong.  I know there are others who are in a similar situation as me, so any suggestions are greatly appreciated.  Thanks in advance!

Greg Dickerson · Answer

@Robert Zazac make sure to talk to several banks, mortgage lenders and mortgage brokers as they are all very different and have different programs, rates and terms.

You could ask for owner financing with a balloon and refi the owner out later.

Talk to the private lender but make sure you have a nice presentation of your current portfolio and experience.

Attend some REI meetings and groups in your area and look for other potential investors, partners or lenders.

Robert Zazac · Answer

Thank you all for the input.  I'll be continuing to explore all possibilities.  @Janet Harbor I'll send you a pm!

Tj Hines · Answer

@Robert Zazac

Through research, some things that have come up are portfolio lenders, commercial loans, partnering, co-signers, Personal lines of credit, and creative financing.

(This is your answer to your own question, if you personally don't have the entire DP to bring to the table)

Patrick O'Shea · Answer

@Robert Zazac, can you house hack again? It seems you have done it once already. Why not try to buy with the intention of moving in there for a year as soon as one of the leases are up? Then you can reduce your downpayment to 10% or less right? You probably could move back into your previous unit in a year, or stay in the triplex, or move on to the next property.

You could also try BRRRR. Use hard money, try to renovate as leases expire, re-lease or shuffle the tenants, and refinance to get your money back. This one's a stretch, but it might be possible.

Danny Randazzo · Answer

@Robert Zazac you should find someone to partner with on the deal for the areas where you are lacking. Maybe this partner could invest some money in the deal but also have a strong w2 income to qualify for the loan

Janet Harbor · Answer

Pm me, I’ve got a guy that might be able to help depending on the details of your situation.

Ideas for funding/financing multi-family properties!?

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