Apartment Buildings

[Doug R.]

I'm looking to get into my first apartment acquisition hopefully 5-10 units to start. What is the best route for financing with a small downpayment (10-15k,) but very high credit score?

[Anthony Gayden]

@Doug R. I am just getting started in the apartment world, and it requires more money than single family investing. I was flat out told that I could not qualify for a loan on a building with more than 4 units without 2 years of landlord experience. So I started with a 4 plex. Also if you don't want to occupy the building, you will have to put 25% down. That is a big limiting factor for a lot of people.

However there are ways you can get into this business with much less money down. You can use an FHA loan to buy up to a 4 unit building if it will be owner occupied. That means you can buy a 4 plex with 3.5% down. If I lived in a better market, I would have done the same, but it is not a possibility where I live now. I went the route of 25% down, which is harder, but the payout is better due to lower mortgage payments and no PMI.