Financing in Jersey City>Question Details

Tyler, Home Buyer in New York, NY

Are there still ways of getting 100% financing on an investment property?

Asked by Tyler, New York, NY Wed Mar 11, 2009

I am interested in investing in a multi family home. I would like to run it as a business and dont want to use my personal money to essentially start this business. Is it possible to get a small business loan and use the money as the down payment on a property? Is this even smart to do so? I just want to separate my personal investments and liability from the business.

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Tyler, I don't believe it's possible at all because the way you are stating the your question, you are looking for a commercial loan. A business can only obtain commercial loans and commercial loans require a significant down payment 25-30%. If you were to apply for a business loan, money is very tight there as well.
I specialized in 100% down payment loans and all of those programs are gone and some of the banks as well (Leh... Brothers). The best chance you would have would be to purchase the Multi Family yourself as owner occuppied FHA. You would have to live there, but it would require only a 3.5% down payment plus closing costs
1 vote Thank Flag Link Thu Mar 26, 2009
Tyler,
To do an FHA loan, the building must be between 1 and 4 units, not 5, 6, 7 etc
Do not commit loan fraud. FHA properties must be owner occupied and and the government is cracking down.
If you have a house already with a lot of equity, why not do a cash-out refinance of your primary, set up an LLC for the new building, and effectively finance 100 percent? I know you want to keep your personal finances etc separate, but this would be as close as you would get to your ideal situation (in my opinion)
Ruth Bonapace
mortgage specialist
ruthbonapace@gmail.com
1 vote Thank Flag Link Sun Mar 29, 2009
Many investors start with a home to live in and then save money for a down payment for their first investment property but there are some ways to do this like live in small houses or cabins because the value of the cabins increased by the time and you can know more by reading this article of How Do You Get Started in Real Estate Investing?
i think it will help you
0 votes Thank Flag Link Mon Mar 30, 2009
The days of 100 % financing are gone but not forgotten....
0 votes Thank Flag Link Fri Mar 13, 2009
unfortunately, absolutely not. The only way you will get a mortgage is if both you and the prospective property is Fannie Mac/Freddie Mac eligible. They list their eligibility criteria on line and I would encourage all prospective home buyers to read it. Also, HELOCs or (home equity line of credits) are longer available as most banks are very concerned that these secondary claims on homes will not hold-up in court foreclosure settlements leaving them with 100 percent capital loses.
0 votes Thank Flag Link Fri Mar 13, 2009
Tyler,

I am sure I'm not telling you anything you don't already know, but to the degree that you want to remove your personal risk from the equation will be to an equal or greater degree the risk any potential investory sees in extending you financing.

Call it hard money, SBA, etc., all lending is risk based and availability of credit for your investment will be in inverse proportion to inherent risk in the scenario. Increase or decrease one side to get the opposite effect on the other.

Good luck and let me know if I can be of service in any way. If you ever want to discuss residential home financing and how it could work for any situation, always feel free to give me a call or send an e-mail.

Best regards,

Rob Spinosa
rspinosa@mortgagemasterinc.com
0 votes Thank Flag Link Wed Mar 11, 2009
The short answer is no. I don't know of any lenders offering 100% financiang especialy on investment properties.

Good Luck
0 votes Thank Flag Link Wed Mar 11, 2009
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