Funding for a portion of a down payment

[Paige Seeley]

I have an opportunity to purchase a triplex with a partner. The triplex is occupied and currently bringing in positive cash flow. Since it’s an investment property, my lender told me we would need to put down 25%. My partner and I don’t necessarily want to part with that much of our funds. If you wanted to fund a portion of the down payment would you suggest a hard money lender, personal loan, etc.?

I’m also fairly new to investing and this would be the biggest property that I have the opportunity of purchasing so all suggestions are welcome!

[Jay Hurst]

Quote from @Paige Seeley:

@Jaycee Greene the property is in NC. The property rents for about $4K/month total. Purchase price will be around $400-450K. We both have good credit but my lender made it seem like there was no getting around putting less than 25% down on an investment property. So I’m trying to come up with a game plan 

 Conventional loans do require 25% down on an investment property. Those rules are set by Fannie/Freddie NOT your lender, or any other lender in fact. Also, conventional lending will NOT allow you to get gift funds OR borrow unsecured funds to help fund a down payment on an investment property. You can borrow against a 401k or another property you own for example, but that would a secured loan. You also cannot use a second mortgage (from HML/private lender) for a 2-4 unit non owner property. The 25% has to be your funds.

Now, there are non conventional options that would be a bit more flexible but even most of those programs will require at least 20% down with no second mortgages filed on the property.