Profile picture for scb2266

Is there any way to purchase investment properties without putting down 20%.

our job comes with housing and we want to take advantage of buying some investment properties while we can.  We only have about $20k for a down payment, but we are being told that we need 20% for a non owner occupied loan.  Is there anything we can do?
  • August 04 2009 - Saint Louis
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Answers (10)

Profile picture for wetdawgs
Hi Mary:

one of the tricks of effective use of your precious time posting on advice is to check the date on the original post before responding.   For example, this one was Aug 4, 2009.      It is tempting to build one's profile by answering every old question for a specific area, but it may be a trick that has negative consequences when potential clients see responses 2 years after a question was asked.

  • September 13 2011
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Owner finance... and they are out there -- it will take more hunting, and an agent willing to dig deep for you but there are highly motivated sellers.

Good luck!

Mary Krummenacher
  • September 13 2011
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Greetings,
First I would talk with a qualified CPA about the potential tax pros and cons. Second look within your price range you might be able to buy 2 properties and put 20% down on each, that pretty aggressive though, but you can do it if your serious. look for all loan possibilities. talk with a qualified lender that has worked with investors. network with other investors, find out all you can.Professionally yours,Daniel Smrt

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  • August 16 2009
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Profile picture for MariaMorton
If you do not own your primary residence, and have not for the past 3 years, you could buy a home as your primary residence using FHA financing. But, if the mortgage loan was for a primary residence, you could not rent it out. There are people who have housing provided through their job that have bought homes, sometimes in another state, for their primary residence. They go home a couple of times of year to check on the house and enjoy it. Then, in a few years, when the job changes, they have a home of their own. In the meantime, they have a permanent address, the tax benefits, and the security of knowing that if the job ends tomorrow, they have a place to go.
If you are interested only in investment property, you may need to save more money. Ryan Shaughnessy is a good agent in St. Louis. Try talking to him to see what he recommends. There may actually be some homes for sale for less than 20k in neighborhoods that, block by block, are improving.
  • August 04 2009
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Not unless you have a very close relationship with a local lender/banker that knows your personal situation and you have a lot of other investment leverage/cash or other assets that are worth them taking a risk,  in my experience.  Usually a lender wont loan money on a property unless you have 25% at least... due to the declining market status we have.
  • August 04 2009
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YES and NO.

Generally speaking you will require a 20% down payment plus have some money in reserves to cover any vacancy or repair.

However, once in a while you will come across a good deal that can be purchased for less than 20% down.  This is not the norm but it can be done if the conditions and terms are right.

There is a good example on our website where you can purchase a new 3-bedroom duplex for only /,000 down and about X1-IAu86bx2xvfg5t_kbu5y,000 in closing costs.  You can analyze the numbers and market data to see if this makes sense for you in your current situation. (Photo added below.)

Continued success!


.
  • August 04 2009
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Owner finance is your best option. Many commercial property owners will consider financing your purchase at a competitive rate if you are financially sound buyer. They will still probably want 10% minimum as a down payment. You may also find a distressed property with a local bank that will make a deal with you to finance the property with only 10% down, again as long as you are a strong buyer and the investment is sound. Good luck!
  • August 04 2009
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Profile picture for Ken Kopper
scb2266, only investor program that I know of that will accept above 80% is FNMA's Homepath. This program is only available for purchasing Fannie Mae owned properties (foreclosures) and will allow up to 90% financing for investment properties

Here is a link to their site of listings in your area

FNMA Homepath
  • August 04 2009
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Not that are worth considering. Look, save some money, and when you have 25% then start. 20K is a very small amount of money to start being an investor, you need a LARGE cushion even after the downpayment.
  • August 04 2009
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Profile picture for stephhug
Not that I have found. In fact when I posed the same inquiry 2 weeks ago to two of the lenders I work with, I was told you need 25% down! I am anxious to hear if you find anything else different.

Stephanie Grossman
  • August 04 2009
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