No money down on a multi family?

Do you always ahve to put 20% down on a multi family if you are not living in it?

I am talking a conventional mortgage.

How many units?

No, you certainly don’t have to put anything down on a multi-family building. I have done a bunch of deals including multi-family with no money down. In fact, on several deals, I got cash back at closing. The key is to buy the property at a HUGH discount and then borrow at a low LTV (60% to 70% max). The other key factor is to go to a small local bank that makes loans to keep in their own portfolio. Finally, REI is a people business as opposed to a business where you sit behind a computer. It is very important to meet and have a good relationship with key people in your community. Do you know the bank president, vice-president, or chief loan officer? If not, why not???


2-4, non commercial

2-4 if owner occupied yes. 75% of the other units count toward the income, plus yours. If you gain a reputation, then can be done NOO

Noobie question here - what does LTV stand for…


LTV…Loan To Value…

Look at the leftmost column on the REIClub website…you’ll see a header that reads “Site Navigation”.

First sub-header is titled “Investor Information”

7th blue hyperlink under that is titled, “Investing Glossary”.

Great place to look up acronyms such as LTV…

I’ve yet to purchase my first investment property…but LTV is very important in my opinion.

I’ll let other more experienced investors answer your next question 'cause I’m still a little fuzzy in this area…but it has to do with buying at steep discounts and having low LTV’s…that’s where money is made.


You can get 100% financing on a 1-4 unit property even if its non owner occ. Most tiems you can do 1 loan or an 80/20. (80/20 = 1 loan @ 80% and a second at 20%).
Ipersonally think a HELOC is good for a second instead of a higher fixed rate. Over time as you pay down the HELOC your payment goes down also. its a revolving balance. this creating more positive cash flow in the future. Also the more you pay down the HELOC if you need it in the future its available.

You can get 100% on any number of units (NOO) if you buy it right and can borrow at a low LTV. You’ll need to use a small local bank.


A low LTV on a conventional loan is irrelevant. You’ll have to buy at a huge discount anyway to cashflow on a 2-4 unit building financed at 100%. To make life easier for yourself, look at buying 6-12 unit buildings. Less personal qualifying!

Why would I have to use a small local bank?

Small local banks love to do local projects with big titles, for word of mouth, and to have a local loyalty. They are a great tool. Lots of times they have more personal opinion to approving the loans too unlike bigger banks who only generally go by procedure.

Going along with what involved said, small local banks/ mortgage companies are usually portfolio lenders. They keep every note in their portfolio and collect interest on it. Large banks/ mortgage companies sell the notes to larger organizations like Fannie Mae in packages. This is why they have such strict underwritting guidelines, because it has to look risk free to Fannies Mae, or they won’t purchase it. The big banks will service the loan (collect payments, assign late fees, foreclose, etc.) for a fee from the larger organizations.

Therefore, small companies/ portfolio lenders are much more flexible with terms because they aren’t trying to make the note attractive for selling. Loan servicing and originating is where the highest yield is if your interested.

Excelent point, I wasn’t thinking of why they did. That makes more sense for the higher approval of planned projects. Portfolio rather then selling.

Thanks. Exellent answer.

On second thought:

I have no idea what I am talking about so excuse my ignorance.

Is it easier to get a loan from someone who gives federally insured loans such as an FHA loan? I don’t think small banks can do that can they? Can you get a FHA loan for a NOO multi family? If so, would it not be attractive to the larger organizations who buy the loans?

FHA is for people to live in. there are other government backed loans for if you supply special housing, like low income, and special needs.


Can you get an FHA loan on a multi family if you live in it?

These questions could easily be answer on

Wow! I’m a lender/investor and I’m absolutely telling people to avoid the HELOC’s right now. 90% of those available are NOT fixed; they adjust every time the Fed farts and, if you got one a couple of years ago, your interest rate has shot thru the roof, as well as your payment. Try to find one loan that’s attractive on it’s rate and term, even if you have PMI. If your LTV passes below 80% you can get that off the loan at that time.

When doing traditional bank financing, I use deferred-interest loans (also called neg-am’s by people mis-using them), invest the difference between my start payment and my fully amortized payment, plus whatever cash flow I have post-expenses. Now you are truly leveraging your investment properties. Even should your property value go down over time, you can cover it from the invested monies. I have a large portfolio of investor clients in SoCal I’ve done these for. HELOC’s are just too volatile right now…