All Forum Posts by: Elijah Wichers

@David A Lisowski

You make a good point. Thank you for the feedback.

@Wayne Brooks

Ok, thank you. Makes sense. Appreciate the feedback.

@Nick Dunin

I agree with you. From my research there are a few options that offer low down payments but I also read that some lenders that usually require a 20% down payment will significantly lower it if you get PMI. Do you have any additional information on this? Thank you.

@Corby Goade

Hello again Corby,

Yes, I agree that the FHA loan is a great way to start. But couldn't getting a regular loan with PMI to greatly reduce the down payment be just as beneficial and good as an FHA? They both have very low down payments and require PMI because of this. Let me provide a hypothetical. Let's say you get a loan that typically requires a down payment of 20%, but you lender will allow you to put 5% down given that you get PMI. Is this just as effective as getting an FHA loan? Is this a smart way to go about real-estate investing to lower capital requirements? I hope I am clearly getting my question across. I really appreciate your input. Thank you.

@Audrey X.

Thank you Audrey for your input. Good point. I knew it would take away from cashflow but if I was able to pay less for a down payment, I figured I would have more cash on hand to possibly be able to get another property shortly after. Mostly was thinking of using PMI to shorten the time it would take to save up enough money for another property. You make a good point though. Thank you.

@Gaetano Ciambriello

Thank you for the response. Are you sure you cannot get an investment property with less than 20% down? I know like you mentioned you can get lower down payment loans, although they require you to reside there for a year. However, couldn't a lender let you put down less than 20% if you get PMI? And if so, is this a good way to go about getting investment properties without having to live in a property for an extended period of time?

@Corby Goade

Hey Corby,

Let's say for individual investors using there own capital to get rental properties. In that case, to reduce the amount of needed capital upfront and to be able to have more capital to get more properties, is it wise to use PMI to lower down payment amount so you have more money left over for another property? I feel like the majority of investing funds are decimated with large down payments. Would this be a reasonable and sound financing strategy to use or are there more drawbacks or even benefits to doing this? Thanks.

@Bob Okenwa

Hey Bob,

I am aware that there are loans out there that allow very low down payments, but even the FHA requires PMI. However, my question is more geared towards using PMI to lower down payment costs of the more conventional loan options that have higher down payment requirements. I am still learning but a lot require you to live in them or you may be limited to how many of those loans you can use. So my question is more on the principal of it. Thanks.

Hello,

I have been researching loans and financing options and discovered that many lenders will let borrowers put a lot less than 20% down on a property, given that they get PMI. Now, this sounds great for investors not wanting to put down a lot of money upfront and seems to be a great way to get more properties. However, with this strategy, it seems with a higher mortgage rate from putting less down and the cost of PMI might make it very difficult to find a cash-flowing property. Can anyone inform me of the pros and cons of doing this and enlighten me to any additional information? I am new to this and trying to study more about real estate investing. I would greatly appreciate any time, effort, and insight into this topic. Thank you.