Multifamily Investment

How To Finance A Multifamily Property With No Money Down

By October 7, 2017 No Comments

If you have been exposed to real estate investing industry, chances are, you have thought about investing in multifamily properties. If yes, you have probably heard regarding its perks such as big tax breaks, easier management, and more cash flow. However, if you are low on funds, you might wonder if it is possible to finance multifamily properties with no or little downpayment. You might also assume that if you do not have big amount of money, investing in multifamily property could be beyond your reach.

While it is true that most real estate investing deals like multifamily investment property can be deprived of crucial cash flow if there is no suitable down payment placed, it does not mean if you are strapped on downpayment side, you cannot purchase multifamily real estate. As a matter of fact, through being creative with your financing options, you can easily learn some strategies in this field. Here are also the other strategies that can help you finance a multifamily property without having a huge amount of money:

Private Money

The private money lenders are not only useful when acquiring some single family homes. The private lenders may be useful especially on multifamily side of things including investing in the multifamily apartments and could be a good way to move forward on the development project if you do not have the funds for downpayment. Like with single family properties, the private lenders do not have to be connected to the investment firm. As a matter of fact, several best money lenders can be found within your current social network and this includes colleagues, doctors, friends, family, and so on.

Material Sales

It is not always possible for each multifamily property project, yet there are times when the property might contain valuable natural resources, which can be sold upon purchasing the property to help generate downpayment. Some material examples can include things such as fertilizer, timber, gravel, plants, and dirt or any resource that could prove valuable to the other party. It is also all about seeing the past the multifamily property’s perceived value and determining whether there are some hidden opportunities that could make the deal more palatable and realistic for you.

Equity Shares

Finding equity share investors is different compared to working with private money lenders. With the private lenders, you’re promising a return for investors. However, with equity share investors, you’re providing them a part of the property’s equity in exchange for the funds required for downpayment. This is actually a great strategy for the reason that equity is attractive to the investors and this provides the investors both an opportunity to generate long term and short term cash flow, something you may use for motivating would-be investors in your quest for downpayment.

A Friendly Reminder: As with any kind of financial transaction, it is always important to do your due diligence as well as consult with the best financial professional to ensure a certain strategy works for your requirements. The provided information here is only intended to give you more knowledge about how to finance multifamily properties.

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