Down Payment % Loan Options

[Joseph Matarazzo]

Hello everyone,

I currently own one multifamily in New Jersey which is also my primary residence. I am looking to purchase a second multifamily property. My question is, what percentage down payment is the minimum I am able to put down for different loans? Are there any loans that let you put down 10% for example instead of 20% ?  Would me making this my new primary residence make a difference?  All advice welcome. 

[David Da Silva]

@Shivam Patel

$300 per mo isn't much cashflow, especially given the fact it's only one door. If you lose one month of rent, you lost half a yr of cashflow at least. This is why I only deal with multifamily properties when it comes to buy and holds here in NJ, but that's a whole other conversation. In this case, selling might be your best bet. 

Any multi I look into for myself (or my clients) must have the potential to cashflow at least $800-$1200 per mo when fully rented (we usually surpass this number after bringing in creative strategies).

With that said, if you choose to refi, the rate may go up slightly, but remember that if your 1st loan was FHA, you're also knocking out the PMI which will save you at least $200-$300 per mo my guess.

If my clients want a single, I always advise they do an FHA on a multi first, then do a 5% conventional on a single. That way their 1st deal pays for their home.

Hope this helps...