No/minimal down payment for a multi-family rental property - what's the real scoop?

[Andrew Daley]

New to RE investing. I would like to start acquiring multi-family rentals but a) don't have a lot of capital to put in myself, b) nor would that strategy allow me to build a portfolio within a reasonable time frame. The internet is flooded with 'invest with no money down' classes/tutorials but what is a realistic way to do this? How can you couple private money lenders with traditional/DSCR loans to make this happen? Does the traditional/DSCR loan lender (who only will give 80% LTV) allow for another source of lending (such as private / hard money)? And then how - typically - does the hard money work? For instance do they provide the 20% down cash but required x% interest only payments each month for Y years and then assume you can cash-out refi at that point and pull some equity to pay them back? What does a hard money / private money lender need to see in order to qualify for that funding?

Does anyone have a proforma model (excel / google sheets preferrably) that incorporates this (if it is possible)?

[Alex Hunt]

Hi Andrew, 
Lenders typically do not allow financing of the down payment. However, in real estate investing, you can explore options like seller financing or structuring deals to lower the initial down payment to around 10%. Combining private money lenders with traditional/DSCR loans can be a strategy.

Private money lenders may provide the 20% down payment in exchange for interest-only payments over a specified period. The terms can vary, but the goal is often to cash-out refinance later and use the property's increased value to repay the private lender.

To qualify for private or hard money lending, lenders typically look at factors such as your creditworthiness, the property's potential, your experience as an investor, and your ability to generate positive cash flow from the investment.

Please feel free to send me a PM. I can take a look at a property with you. 
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