In Need Of Advice
My sister is interested in purchasing a 4 unit multi family property for around 170000. Her out of pocket expenses would be around 24k including down payment and closing cost. What creative ways can she use to lower this? Each unit rents for around 475 and her rate would be at 6.125. He thought about having the seller pay the closing cost, but an agent told her on an investment property the seller can only pay 2%. We have thought about the seller maybe carryback some of this amount but that would cutt her cash flow by having two mortagaes to pay. Any ideas guys? What are your experiences?
Would her credit score allow her to finance 95%? If so, why not do that on an interest only loan to keep the cash flow. You can also have the seller contribute the 2%, roll it into the sales price if necessary.
Her middle score is right at 700. Do you mean finance 95% of a portion of the 170000 and still have the carryback mortage or..95% of the whole 170000...because its an investment property and the bank wants 10% . Do you know of any lenders that will do 95% on investment property? She is in Myrtle Beach South Carolina.
Yes, the standard is to put 10% down on an investment property. I would recommend finding a good mortgage broker who deals w/investors frequently. There are many lender who will do 95% financing on an investment, some even 110% depending on your credit. I would call around and see who you can find in your area. I personally have done this many times, 5% down on an interest only loan- interest only stays in place for 10 years before the principal payments are included at which time your rents should have been raised enough to accomodate the higher payment or else refi again into a similar type loan.
Typo- I meant 100% financing not 110.
Thanks dsharon I am going to check into that. Anybody you know off the top of your head?