Any way to buy this 4-plex with no cash out of pocket?

I have an owner of a 4-plex, fully rented, income is $1900 per month. He will sell for 95k (appraised value) or possibly less.

Is there any way to structure this so I could buy it without cash out of pocket? I’m new to MFHs. He said as long as the underlying loan of 80k is paid off, he would consider taking back a second for the rest. Any creative ideas?

Yes, there are a LOT of ways to buy this with no money out of your pocket. You could buy it sub-2, with a lease option, via owner financing, via bank financing with an owner 2nd, with money from a friend or 3rd party investor, etc, etc, etc.

However, if the owner wants his mortgage paid off at closing, then your options are diminished. Have you been to some banks to see what you can borrow?

Good Luck,


I guess I want to know how likely it is for a bank to let him take back $16k for the 20% down, and then finance the 80k.

You’ll never know unless you ask the bank!!!


100% CLTV (combined loan to value) is a more difficult product to find. Especially these dayz…

Good Luck!

I’m not so sure about this comment. Maybe where he invests or his bankers don’t like to see this, I don’t know. My bankers will do 80/20 all day long. Go to the bank and ask them, this should be a good deal to get into for you. Good luck.

I dont have the experience the others have but I think buying anything with no money is a bad idea…UNLESS you have a nice fat back up account with a good amount of cash in it…

Real Estate takes money to get started…It takes money after you buy also…The worst possible scenario you would put yourself in for a first deal is a default position…You buy this 4 family and 2 furnaces go and you need a new roof and 2 kitchens you are done…

I have to disagree with a few points here. 1) No money down is a bad idea. I’m not so sure why you would want to expose your own cash to an investment property. I personally would rather keep my money in the bank and use it for whatever the hell I feel like as opposed to having it tied up in some property. 2) Real estate takes money to get started. If you’re good at making deals you can create cash at closing the very first deal and that can set you on your way as far as having reserves and contingency funds set aside. 3) 2 furnaces go, new roof, 2 kitchens. Anyone with any sort of evaluation skills would notice and address these problems during their due diligence period. A home inspector will test and evaluate all mechanical systems, the roof, electrical and plumbing systems, etc. for a small fee. Sure things can go wrong, and they will, but you can hedge your exposure to these problems if you properly evaluate your properties.

100% financing is no longer available in the wholesale channel—you should try your local bank that you have a depositary relationship with.


Scott Miller

I understand you and I are always on different sides of the spectrum when it comes to NEW investors using no money…This poster said that she is new to MFH ,how could you not first find out if this person has sufficient funds for backup before you recommend the zero down route?..

Also propert inspectors are hardly the tell all on a house…I agree they spot some important issues but anything can come up on multi’s…Every issue on a multi is expensive,and even more so when there is no back up funds…The simplest thing as a furnace going is 4k minimum…

I will never agree when it comes to a person with no backup funds attempting to buy with zero dollars down/into the deal…These type of high leveraged loans are the exact reason why this country is in the economic shape it is…You cannot put leverage into someone’s hands that has nothing to lose…

I would also guarantee that the people here who promote this no money down nonsense to underfunded new investors would NEVER hold that mortgage if it was their money…

In my opinion, we’re really talking about two different issues here.

The first issue is whether to buy with 100% financing if possible. I’m very much in favor of financing 100% of the purchase price PROVIDED THAT YOU’RE BUYING AT A HUGH DISCOUNT (will have a lot of instant equity).

The second issue is whether you need a reserve to operate a rental property business. The answer is ABSOLUTELY YES!


Good points all around as usual by you guys and I’d add this. I certainly don’t advocate buying with no money down if you have no money, I think everyone would agree that’s a recipe for disaster. What I do support is the fact that you can buy with no money down to begin you’re investing career, BUT if you’re going to do that you need to create cash at closing for yourself so you have some cash. If you are going to buy a 4 plex and if you finance your closing costs you should have a few thousand in security deposits and prepaid rents (I always close at beginning of month for this reason.) Also, if you buy at a steep enough discount, say 60-70%, you can get the bank to give you up to 80% which will put money in your pocket. Of course this strategy is predicated on the fact that…

PROVIDED THAT YOU'RE BUYING AT A HUGH DISCOUNT (will have a lot of instant equity).

I agree with everything said, I was just pointing out that it is POSSIBLE to start with no money of your own and buy with no money down, IF you do it correctly.

By the way, you must have some super duper furnaces if they are costing you 4k minimum. I pay about $800/furnace for a 100,000 btu, 92% efficient unit. I install them myself and that helps, maybe you’re talking about 1 unit to service the entire 4-plex, if so I guess that’s about right.

On investment property? or owner occ?

Non-Owner Occ.

My banks will give me 80% of the purchase price or the appraised value, whichever is lower. The other 20% comes from my cash, equity, seller participation. The highest I have seen for owner-occ is 97% using an FHA first time home buyer program. Propertymanager says his bank will do 100% of the purchase price if the deal is good enough, so 100% CLTV is out there, in a few different forms as you can see.