Does this type of financing exist?

[Tanya Knickerbocker]

I have offers on two rental properties accepted that are contingent on financing. One is $145,000 for a four Plex. The other is $160,000 for two houses on one plot of land. The problem is I only have $40,000 in cash. Is there anyway I can finance both of these properties? They would both cash flow well on a 100% LTV loan. How can I get this done? If I can't, I will have to choose just one of the properties but that doesn't seem like the best solution. Any creative ideas?

Thanks!

[Cara Lonsdale]

Buy the $160K FIRST as an owner occupied and obtain an FHA loan, putting 5% down ($8,000). Live in it for at least 12 months.

Buy the $145K as an investor obtaining a conventional loan with 20% down ($29,000).  

Between the 2 purchases, you will have used $37,000 of your $40K down payment.  This leaves you money for reserves.

To preserve what's left of your out of pocket funds, request a Seller concession for your closing costs. With your FHA loan, you should be able to request up to 3%. With the investor loan, you will be limited to 2% in most cases.

For a cleaner qualifying situation, don't try to close them at the same time. Close your FHA first, then schedule your investment property to close 15-20 days after the first transaction to give the lender time to calulate the first transaction into your DTI to complete the 2nd transaction. Since they both cash flow, that income should be able to be counted with your income to qualify.

Best of luck to you!