Starting with little downpayment cash.

[Brandon Proctor]

Hello everyone, 

I have been scavenging through the forums lately looking for some advice on this and listening to a Podcast right now. Question is how does an eager hopefully soon to be investor get into the game with little for an downpayment? I see that investors have to put down 20-25% on an investment property. Which for me would be quite I big chunk of money. I know there is the VA loan for military members which I could use but I have to stay in the home for "x" amount of time. I also have heard about FHA loans but I'm not sure of the ins and outs of this loan.

Are there any other outlets out there in which I have not stated? The last option I know is getting a personal loan from a coworker, family or friend.  Do I know any of those mentioned that could give me say 20k I honestly don't know.  I maybe rambling a bit right now but I'm typing my thoughts down as they come.  

Also is there anyone out there in my local area that could possibly show me the ins and outs of how they go about their business?  I have networked with a few awesome people in my area just wondering if there are others out there. If there are other investors close I am willing to help out with whatever I can. Thanks everyone!

[Account Closed]

@Brandon Proctor 

I've also been aggressively persuing investing with little money down.  Depending on what you're interested in doing specifically with investing, there are different options I've read about.  I'll list a few below with a few comments:

1: FHA - requires you to live in the residence (at least one year by contract), lower interest rate, but required mortgage insurance, 3.5% down, very strict appraisal and inspection FHA requirements, you can only have one FHA loan (within a certain distance of each other). There are different FHA loans to accomodate structural or cosmetic fix-ups if needed.

2:  Do you have a Key Bank in your area?  They do "community loans"... same sort of story where you need to live there for at least a year.  Don't know much more about it other than lower interest rate.  If you don't have a Key Bank, you can always check around your local banks/credit unions to see if they have something similar.

3:  Hard money lender - you can google search or search bigger pockets for more information.  Sometimes they will lend 100% of what you need but with the trade-off of charging you a very high interest rate (10-18%).  Typically lending options last up to one year before you need to refinance or use your exit strategy.  I believe this type of lending is best for doing flips.  

4:  Does your job have a benefit/discount on loan information/closing costs/etc?

5:  Owner financing - You can easily find properties that owners are willing to finance and be your "lender".  I find them often on Craigslist.org in the real estate section.

6:  Lease Option/Lease Purchase:  Like a taste-test, you can "rent" for however long the lease lasts, then purchase using some of the "rent" you paid as toward your down on that property.  

I've been studying lots of financing and am always hungry for more information.  Much of this information is referenced from bigger pockets and from a book I read on lending, "Mortgage Secrets All Borrowers Must Learn - But Lenders Don't Tell" Gary W. Eldred, PhD.  It might be sort of dry, but extremely informative about your buying options.  

I hope this helps!