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> In early 2016 I purchased commercial real estate, got a 25 year fixed rate mortgage, and leased it. What was your downpayment? Asking because I tried to do t
by sean_patel 10y ago
> In early 2016 I purchased commercial real estate, got a 25 year fixed rate mortgage, and leased it.
What was your downpayment? Asking because I tried to do the same thing earlier this year. Thought I was clever, did the math on how much I can rent out an apt on AirBnB, and what the mortgage would be on 30 year fixed, and my calcs said I need to put only 5% down to break-even. Then I contact lender and turns out, for Investment properties, they require minimum of 25% to 35% cash as downpayment. They said this was to hedge their risks against a borrower who would bail easily if an investment property goes south.
Any way around this? i.e. around not having to put 25% down on investment RE?
- tomcam 10y agoNo. Because the lender knows your AirBnB investments could easily be regulated out of existence. I suggest you live super frugally and save up cash for your real estate purchases. (We did this and so have many of our friend.)
- sean_patel 10y agoThanks tomcam (cool username btw :)