Financing with less than 20% down

[Isaiah Sullivan]

Hello – I have a few questions focused on financing an investment property. Any detailed/thoughtful help is greatly appreciated.

Situation:

I have 2 partners and together we have $30,000 - $40,000 in cash we’d like to put to work in the city of Atlanta. We live in New York, but have very strong ties to Atlanta. At a very simplified level, assuming we have to put 20% down for bank financing, that gives us firepower to buy properties between 150k-200k. I’m aware that I’m excluding fees, expenses, rehab estimates, etc. but let’s keep it very simple for now. My focus is on the 20% down payment for an investment mortgage. Is there a workaround to put down less? For example, if we added a 4th partner who is based in Atlanta to live in the property for a certain period of time, could the loan be viewed as a regular way mortgage versus an investment mortgage, resulting is us having to put down much less than 20%? If this is a possible solution, how would this impact the Atlanta individuals credit or ability to buy additional properties under similar financing terms? How would the bank be able to verify if our Atlanta partner is actually living in the house? I’m assuming they won’t do physical checks.

In a perfect world, we would like to purchase a property by putting much less than 20% down, rehab it and then finally sell or rent it. I’m hoping that we can exploit some lending loophole by having an Atlanta partner actually live in it for a short period (e.g during the rehab process).