How to avoid the 20-30% down payment

[Shanai Inns]

Hello Everyone. 

I'm looking to invest in my next rental property and I would like to avoid depleting my cash. Is there a way to get around putting 20-30% down? The fact that I am looking to buy multifamily properties limits my options as to what traditional loans are available to me. For example, Fannie Mae and Freddie Mac loans are only available for single-family homes. 

I am aware of private lenders, however, I have no idea where to go looking for them.

Any advice is greatly appreciated. Thanks in advance for all your comments!

Shanai Inns

[Drew Perkins]

You can pledge some other type of collateral, options being:

1. your primary residence

2. a certificate of deposit at the institution or another institution

3.  a co-signer's piece of collateral, etc.

4.  car or car collection, or some other personal property that you could put up

Also, you could have the seller carry the 2nd mortgage to avoid a downpayment on a shorter term, etc.

Sometimes offering to put the term of the loan on a shorter amortization or an earlier maturing date would allow you to keep down payment smaller and give you flexibility down the line.  

Hope some of that helps and good luck!