Financing with little or no money down?

I posted this in another forum but agian it looks like it should have gone here instead.


I am new to this site and am glad I found a good RE site. I have been in RE for a few years and bought my first rental Dec. of last year.

Hopefully within the next 12 months I would like to buy a Rehab and sell property or a muilti unit rental, possibly over 5 units. I have a great credit score and decnet income but I don’t have a lot of capital. I though about using a HELOC and I may have to but I would like to keep a HELOC open for emergency money.

Do you any of you have suggestions for lenders that work with REI that will let you buy with low or no money down, I don’t mind if it is rolled into the loan.

Do you have any suggestions on how to obtain low down financing for rentals or flippers?

Thanks for any help you can give.

It’s all about the credit.
If you can show 6 months PITI in the bank, it can only help.

With good credit and some reserves 100% is no problem on a 1-4 Family.

If you are looking at commercial the best you are going to get is 80% LTV / 90% CLTV

Another option (for flips) is hard money. For the longest time I was really opposed to it, but for some situations it really is the best route.

Hello, My advice is always to go with a traditional lender first and use HML as a last resort. Since you do not want to use your current equity, you may want to consider going with a HML as an option.

That’s good to know. I think I could get 6 months PITI plus have HELOC ready to go just in case.

I have thought about hard money lenders too. How do they usually operate as far as paying them back, interest, closing, and that type of thing. How long do you normally have to finish a rehab before things go bad?

Is HML like a second mortgage?


Hello, A HML will always want to be in the first position on the loan. They have a higher interest rate and points than traditional. They set their own terms and criteria but close and except payments the same way as traditional.
Also, they ask for cash available, equity in other properties (or your own home) or collateral to secure the loan. Their is the possibility of using a private investor to fund your project. I would need more details.

If a property requires a rehab and you do not want to use your heloc a hard money loan would be the best choice. This type of loan will give you 100% of the money needed for the purchase and 100% of the money for fixing up the subject. The total amount can be up to 65-70% of the after repaired vale. Some will allow you to add interest and points into the loan so it is paid off when the 6 months is up. When the property is complete you may want to consider refinaning to get cash out from the increased equity.

For properties that are 1-4 units and do not need work, 100% financing will be easy for you to qualify. The seller can even pay for closing cost which limits what you are required to bring in. This can be done with 2 months of reserves, fixed or ARM, and interest only to keep increase cash flow.

There is a lot a mortgage consultant should know about investment properties. Including:

  1. How many properties are currently financed?
  2. How many properties have been purchased in the past 6 months; in the past 24 months?
  3. Does the borrower have landlord experience?
  4. Will the subject property have a negative cash flow?
  5. If the borrower doesn’t show enough income he may need to go stated, no ratio, or no doc
  6. Usually a borrower will need 6 months of reserves. (6 months of principal/interest/taxes/insurance) If multiple properties are being financed, reserves for all may be required. This could also apply for properties purchased in the past 6 months. If funds are not available the borrower may need to go stated or no doc.

Lenders vary in their guidelines and this is why long term goals need to be addressed. Certain lenders will need to be used first as their property restrictions will prevent financing. The lenders that allow unlimited properties usually have higher rates and should be used as the portfolio grows.


Just came across your response to REIUSA and wanted to say thanks for your insight. I do a lot of rehab and can’t express enough the importance of hard money when value is subject to property repair. We have a saying around here… don’t try to put the round peg in the square hole. Hard money, although costly, can save valuable time and eliminate many headaches.

Hope to hear more from you in the future.