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Updated 3 days ago on . Most recent reply
New investor looking into commercial real estate
I've been looking for my very first residential rental of my own for over a year and due to not having a ton of startup cash (70k) and the fact that any good deal i found is purchased within days of being listed, I've had no luck. I work a M-F office gig but looking to supplement. Investing wise, I'm looking at switching gears and getting into multi family properties such as a smaller apartment building. Does anyone have any advice on best practices to fund that? Again, 70k of my own cash, over 6 figure personal salary. No LLC yet, so I'm at ground level and need some advice from a guru or two.
Most Popular Reply
Hey Dino, here are a couple financing routes you might want to consider
FHA Loan – If you're open to house hacking and plan to live in the property, you can get in with as little as 3.5%–5% down. It's a great way to get started and build equity while living rent-free or close to it.
DSCR Loan – Personally, this is the route I prefer for pure investment properties. Most DSCR lenders want around 20% down and a DSCR ratio between 1.15 and 1.35, depending on the product. The big plus here is they underwrite based on the income and expenses of the property, not your personal DTI, which gives you a lot more flexibility if you're scaling.
If you're serious about multifamily, it could also be worth building relationships with local commercial brokers and starting to network with potential partners.
Happy to connect further if you want to bounce ideas!