Multi family financing

[Rudy Manna]

I have a multifamily home under contract and I am going with a local bank . I am putting 25% down, regular loan (this is my 3rd property). I asked the bank If I can go with 20% down payment and the bank tells me that I can't go below 25% for multifamily properties.

Does that sound right? For this purchase I will probably go with the current bank but for future purchases I want to learn if there ways to buy Multi-Family with 20% down-payment. 

[Jered Sturm]

@Rudy Manna, 

@Allen Fletcher is right on, its time to negotiate. Small lenders are great because they have flexibility. Loan officers are not always the most creative people, they know their guidelines and they can recite them to you. But you as the entrepreneur need creativity. 

Recently, I was negotiating the loan terms on a 42-unit apartment building we are purchasing. The lender, with whom I have a long-relationship, only does 75% LTV loans on commercial loans. I asked for a 80% LTV, and they said, "No, we never, ever go to 80% LTV." This purchase was for just over $2 million, so the difference in 75% to 80% LTV was just over $100k. I then asked, "If I put $100k into a 6-month CD at your bank, will you go to a 80% LTV on the loan?" This would allow the bank to increase their lending limits and make more money by lending out my $100k. In 6 months, I get my $100k back, and I'm left with the loan I wanted. The bank agreed to my structure with a 12-month CD. Until this loan, this bank had never done a 80% LTV. That changed because I was willing to ask.