Creative ideas to buy a multi-family after first home?

[Alex Rocha]

Hi all,

My wife and I recently closed on our home back in March. I’ve been saving aggressively to buy a multi-family since, but I was wondering if anyone had some creative strategies to take advantage of some of the loan programs so that I don’t need so much upfront. I know, I know, I should’ve bought the multi-family first, but the home we bought was a steal, so I couldn’t give it up. I welcome any and all suggestions. Thanks for your help!

[Tommy Adeoye]

@Alex Rocha

Congratulations on your newly acquired home. 

There are multiple creative path depending on what the details of your situation are. For instance,

- How much of a steal was the home? 

- Did you put 20% down or 0-3% down ?

- Are you able to use your savings to throw in some value add so you can refinance and pull some equity out?

To mention a few.

With that being said, if you are able to find another multifamily steal, you wouldn't have  that much of a problem raising capital or coming up with creative finance strategies. Here are a couple of pointers to help get your brain storming started;

1.) Partner with a BP Member (preferably one in your area): It's a seller's market right now and presumably there is a lot of investor money floating around. It's okay to split equity just to get your feet wet and move on to the next deal. Caveat: Always do your due diligence before you partner with anybody.

2.) House hack: The barrier to entry is low when you use the FHA financing . You will only have to put down 3% and sometimes if you find a beat down property, they will fund the repair cost up to a certain amount . Do some research. - FHA 203(b)

3.) Vacation rental products: Some banks are buying into the short term vacation rental action so long as the prospective property is miles away from your home of residence. Talk to a couple of small banks around your area.

4.) Seller finance: Understand seller financing and pitch benefits to the seller, You can also do a lease to purchase. Depending on the seller's condition, it may be a win win for both you and the seller.

I am certain they are other creative finance options available that I must have missed, It may help some more if you connect with some of the investors in your area(via BP or your local meet up).

Best of luck.