Catch 22 of No Down Payment for Investment

[Ed Goble]

Here's the catch 22.  My house (primary residence) is paid off.  I have perfect credit.  Regular investment mortgages would be easy to get.....  if only I had a down payment, because they only cover 80% most of the time.  Because I have no debt, I have no savings.  As a matter of principle, I will not use equity from my primary residence to fund the acquisition of others, and it will take many years to save up a down payment to get in to my first investment property.

I talked to hard money lenders/private money people today, and they will not only not fund a second mortgage for the deficit, but they also charge a large down payment.  It seems that I have no recourse, and my hopes are dwindling.  It seems like the banks intentionally stack things against the little guy unless he puts it all on the line and risks everything to even get started, or work many years for a down payment.  It seems that private money lenders do not exist that will cover 100% of the cost  How is somebody supposed to break through this problem while not risking a house that is paid off and trying to stay out of debt in that house?  I'm starting to lose hope.