Lender loan on "Transaction Value" not on Market Value?

[David Codamo]

I am new to the community, and I have question about a deal on a multi-family property of 16 units. If the agreed price on the property is less than 80% market value, would a lender give you the 80% with no money down?

For Example:

1. If the property is worth $400,000, (Market Value) but the transaction is agreed to as $280,000, ("Transaction Value"), which is 30% less than Market Value making:

2. the "Difference" is greater then 20% of the $400,000.

Then would a lender fully fund the deal with no money down? Since it has been pre-negotiated in the Transaction?

Any information about this topic would be great as well as more resources/terms that you could point me to.

Thank you in advance!

[Patti Robertson]

Depends on the lender.  Union Bank is funding in my area at 80% of appraised value with no cash down requirement based on the current income.  I haven't funded a multi purchase with them. Just single families on portfolio loans.  They required leased be in place in order to do the loan.  Not sure how many would be required for a 16 unit.  Show your local and regional banks.  They are pretty real estate friendly these days, as long as you are credit worthy borrower.