5-10% Down 3-Unit Multifamily?

[Paul M.]

Hi All,

Writing because I recently got into real estate... Last fall, I purchased a 3-unit multifamily and the experience so far has been excellent. As a result of the investment, I'm able to save money more aggressively, and I'm looking to get into more properties in my area.

I found a 3-unit nearby that's got amazing cash flow. I went to see it with my realtor before I bought my current place but we didn't ultimately pull the trigger because the price was higher then. It's at $85,000 now, and I might be able to talk them down a few thousand.

My problem is that, at the current moment, I don't have enough to do a 25% down payment on this property with closing costs... Bank said it'd run me almost $30k. I could probably do something closer to 5-10% down... All in, I think I have around $17,000 cash available.

Does anybody know of any financing options or NY banks/credit unions that would finance a 3-unit, non-owner-occupied property at around $85k with less than a 25% down payment? Thanks.

[John Warren]

@Paul M. you will have trouble finding a lender who will do that loan, but you may have other options available if the deal makes sense. Can you pull a home equity line of credit on your primary? I purchased my first four unit in Lyons, IL with a HELOC. Can you get a private loan from a credit union or bank? Can you borrow from your 401k? What about literally borrowing against credit cards for a few months?

Being creative to come up with the down stroke is the main thing that helps a lot of savvy investors scale rapidly. I am sure you have more resources at your finger tips than you realize!