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Updated 17 days ago, 12/13/2024
First investment property for less than 10% down
Looking to buy a single family home and use as a STR on Airbnb. Are there any loans out there that require less than 10% down?
@Sundone Boutvyseth Unfortunately, none that I know of. Any time you are not living in the property it is more risky for the lender. This risk is amplified the less money you have attached to the deal. In real terms you would walk away from an investment long before a primary residence and therefore most banks will not allow it for anything less than 10%. The only other option would be to get a coborrower to bring the down payment or get seller financing with a lower down payment.
Hope this helps!
Quote from @Sundone Boutvyseth:
Looking to buy a single family home and use as a STR on Airbnb. Are there any loans out there that require less than 10% down?
Not for an investment property.
@Sundone Boutvyseth-the lowest Down for a SFR rental property is 15% ...if you are able to locate an option with 10% down - this is likely going to be pricey but if you need to minize the down - it might be worth using
Quote from @Braydin Mehnert:
@Sundone Boutvyseth Unfortunately, none that I know of. Any time you are not living in the property it is more risky for the lender. This risk is amplified the less money you have attached to the deal. In real terms you would walk away from an investment long before a primary residence and therefore most banks will not allow it for anything less than 10%. The only other option would be to get a coborrower to bring the down payment or get seller financing with a lower down payment.
Hope this helps!
Quote from @Dave Skow:
@Sundone Boutvyseth-the lowest Down for a SFR rental property is 15% ...if you are able to locate an option with 10% down - this is likely going to be pricey but if you need to minize the down - it might be worth using
Quote from @Matthew Wolk:
Quote from @Sundone Boutvyseth:
Looking to buy a single family home and use as a STR on Airbnb. Are there any loans out there that require less than 10% down?
Not for an investment property.
Hey @Sundone Boutvyseth,
Mountain America actually has a private loan program for Utah investment properties that is only 10% down. I've now used it twice.
The program requires 10% down, must be a rental, no PMI, and has a very high standard of credit.
Last I did it (Summer 2022), my rate landed in the low 5%. I believe they're almost 8% with that program currently but if it provides an entry point, you should consider it! Contact me if you'd like a lender recommendation.
On top of the MACU loan, you can buy a STR as a second residence which only requires 10% down as well. I personally haven't done this but I have helped clients do it in the past.
Hit me up if you're interested!
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How do you intend to cash flow with such a low downpayment? I assume rates would tick up for such a low %, too. I also assume you do not have ample cash, so reserves would be even tighter and you'll be bleeding monthly on it cash flow wise.
Hey @Sundone Boutvyseth,
Similar to what @Brad Jacobson said, your best option might be a secondary residence loan if you want to STR. This requires 10% down and you typically just have to live in the property for 14 days out of the year. Rates are also better with these than with an investment loan.
There are a couple of investment loan programs available that offer 10% down as well with no PMI, but they have slightly higher rates. Based on what my mortgage broker told me a couple of days ago, these rates are in the low 7%'s, whereas the secondary home loan is low 6's. I would be happy to connect you with him if you wanted to inquire further.
I think 10% is as low as you will find for investment property, unless you purchase an SFR with an ADU or mother-in-law and house hack with a primary home loan.
I hope that helps!
Quote from @Brad Jacobson:
Hey @Sundone Boutvyseth,
Mountain America actually has a private loan program for Utah investment properties that is only 10% down. I've now used it twice.
The program requires 10% down, must be a rental, no PMI, and has a very high standard of credit.
Last I did it (Summer 2022), my rate landed in the low 5%. I believe they're almost 8% with that program currently but if it provides an entry point, you should consider it! Contact me if you'd like a lender recommendation.
On top of the MACU loan, you can buy a STR as a second residence which only requires 10% down as well. I personally haven't done this but I have helped clients do it in the past.
Hit me up if you're interested!
+1 to this MACU program. It was actually at 5.75% when I last checked on Friday with 0 PMI & 10% down. Really great investment loan program if you can qualify.
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#4 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
- Investor
- Austin, TX
No one would require you to put less than 10% down...
@Eric Yu, @Brad Jacobson, I bank at MACU, but I use a mortgage broker for most of my loans. Rates have not been very favorable through him lately, as you can imagine. Who do I talk to at MACU about this "private loan program" for investors?
Thanks in advance!
@Sundone Boutvyseth I also did a 10% on STR in Florida last year, it's worked out really well, but went through a national lender. Glad to share my experience and information if anyone is interested.
The only product I have seen is the MACU 10% for a non owner occupied.
Quote from @Duane Richards:
@Sundone Boutvyseth I also did a 10% on STR in Florida last year, it's worked out really well, but went through a national lender. Glad to share my experience and information if anyone is interested.
Quote from @Sundone Boutvyseth:
Looking to buy a single family home and use as a STR on Airbnb. Are there any loans out there that require less than 10% down?
NO
Quote from @Gabe Sherrill:
Quote from @Duane Richards:
@Sundone Boutvyseth I also did a 10% on STR in Florida last year, it's worked out really well, but went through a national lender. Glad to share my experience and information if anyone is interested.
Same.
Quote from @Duane Richards:
@Sundone Boutvyseth I also did a 10% on STR in Florida last year, it's worked out really well, but went through a national lender. Glad to share my experience and information if anyone is interested.
Who was the lender?
THere is a loan I have seen folks using in the past... not sure if it is still available but it is the MACU90 loan with mountain american credit union and it is a 10% down investment loan. I would do you due diligence but I have seen others use it to purchase non -owner occupied properties.