Tiffany, what you are describing is a very common area of confusion to most investors. To answer all of your points would require an essay. The short answer is yes, you can buy a home with a conventional loan with 15% down. And there is also a rehab conventional loan. And if you buy a home with cash, there's no seasoning requirement. Those are the short answers. But the reality is that buying a home in disrepair usually means you need to get a good deal on the property to buy it - I mean a REALLY good deal. Which means you need a very motivated seller (or desperate). And the more "motivated" that seller is the quicker your closing needs to be. To do a conventional rehab loan means a closing time of 45-60 days. It's an annoying process and that long of a closing process means your seller might back out. I don't like the conventional rehab loan product and most people don't like using it. Hard money means that you can close quickly. So if the numbers are REALLY attractive (which they should be), who cares if the hard money lender charges you a little more. If a few extra $$$ breaks your deal then you probably shouldn't be doing it. On the other hand if you find a home that needs NO rehab and it's a good price - then buy it with conventional money outright. You can use as little as 15% down. But remember that with 15% down you would pay PMI with that mortgage. So most of my investor clients use 20% down. That way they maximize their cash flow and leverage their money as best they can. Now the skinny to this is that different lenders might have different rules. So one lender may only allow 20% down while another lender may only allow 25%. The real scoop here is that a lender can choose to be more strict if they want to be....but not less strict. In the lending world we call these overlays - rules that are OVER the Fannie Mae/Freddie Mac rules (or conventional). So try to find a lender that has no overlays and knows how to lend to investors. It might be harder than you think to find that type of a lender but we are out there!
