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How to Buy a Multifamily Property with No Money: 9 Strategies to Consider

If you've been exploring the world of real estate investing, you've probably come across the idea of buying multifamily properties. The benefits are enticing: more cash flow, easier management, and substantial tax breaks. But what...

If you've been exploring the world of real estate investing, you've probably come across the idea of buying multifamily properties. The benefits are enticing: more cash flow, easier management, and substantial tax breaks. But what if you don't have enough funds for a down payment? Can you still buy a multifamily property with no money? The answer is yes! In this article, we'll explore seven strategies to finance a multifamily property with little or no money down.

Private Money

One strategy is to seek private money lenders. These lenders can be people within your existing social network, such as family, friends, or colleagues. They might be interested in investing in real estate to get a better return than traditional investment options. By reaching out to your network, you might find the funds needed for a down payment on a multifamily property.

Equity Shares

Another option is to find an equity share investor. This involves giving the investor a portion of the equity of the property in exchange for the funds needed for a down payment. For example, if an investor contributes $100,000, you might give them a 40 percent share of the property's equity. This strategy allows investors to receive both monthly cash flow and proceeds from the eventual sale of the property.

Material Sales

In some cases, multifamily properties may contain valuable natural or manufactured resources that can be sold to generate a down payment. This could include dirt, plants, gravel, timber, or other resources that might be valuable to other parties. By identifying these hidden opportunities, you can make the deal more realistic and affordable.

Hard Money

Hard money lenders can be an option when traditional financing is not available. These lenders base their decisions on the value of the property rather than the borrower's credit score. While the interest rates and fees may be higher, hard money loans can provide the funds needed for a down payment on a multifamily property.

Repair Allowance

Consider negotiating a repair allowance with the seller. When inspecting the property, create a list of necessary repairs and request that the seller reimburse you for these repairs at closing. You can then use this money towards your down payment. Make sure you have a team of contractors or repair professionals to handle the repairs effectively.

House Hacking

House hacking involves renting out part of a property that you currently live in. This strategy can generate additional income to increase your financial reserves. You can list a spare bedroom or shared space on platforms like Airbnb and charge guests for short-term rentals. Research local ordinances and permits, and create an attractive listing to maximize your returns.

Real Estate Crowdfunding

Instead of relying on a single lender, you can use crowdfunding to raise funds for a multifamily property. Crowdfunding platforms allow you to ask a pool of investors for small amounts of capital. To attract investors, you need a reliable network and a strong pitch. Once you prove the success of your property, investors may refer you to others and support your future projects.

Seller Financing

Seller financing is another option, where you make payments directly to the seller to buy the property. You can negotiate loan terms directly with the property owner, cutting out the middleman. While these deals may be somewhat rare, they offer a way to finance a multifamily property without traditional financing.


Consider partnering with someone who brings different skills and finances to the table. Partnerships are common in real estate, where investors split the components of a deal. For example, one partner may handle day-to-day management, while the other provides capital. Ensure you have a solid partnership agreement outlining the division of labor, profits, and a general business structure.

By thinking creatively and exploring these strategies, you can find ways to buy a multifamily property with little or no money down. Remember to do your due diligence, consult with professionals, and ensure the chosen strategy aligns with your financial goals.

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Best Multifamily Home Loans

If you're considering financing your multifamily property purchase, various loan options are available:

  • Conventional Multifamily Mortgage: Traditional lenders offer loans for properties with two to four units (anything larger is considered commercial). These mortgages are suitable for investors who can make a 20 percent down payment.
  • Federal Financing: Government agencies like the FHA, Fannie Mae, and Freddie Mac sponsor multifamily loan programs. These loans are ideal for investors with limited down payment funds who are willing to live in one of the units.
  • Portfolio Loan: Portfolio loans allow you to purchase multiple properties at once. Suitable for investors interested in acquiring up to 10 properties simultaneously.
  • Short-term Financing: If you need flexibility, short-term loans like hard money or bridge loans are an option. They are associated with higher interest rates and can be useful when acting quickly on a deal before meeting longer-term loan requirements.

Consider these loan options when financing your multifamily property and choose the one that aligns with your financial situation and goals.

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Pros and Cons of Buying Multifamily Properties

Before deciding to invest in a multifamily property, it's essential to weigh the pros and cons:


  • Recurring Income: Multifamily properties can generate recurring monthly income, offsetting expenses and providing cash flow.
  • Income Diversity: If one unit is vacant in a multifamily property, the other units continue to generate income, reducing the impact of vacancies.
  • Low Maintenance: Repairs and maintenance can be coordinated for multiple units, saving time and money.
  • Multiple Income Sources: Additional income can be generated through parking fees, garages, or coin-operated laundry facilities.
  • Performance-Based Financing: Financing is based on the property's performance, not just your personal financial situation.


  • Management: Managing multifamily properties can be time-consuming, especially for properties with more than four units. Hiring property managers or management companies can help but comes with additional costs.
  • Higher Turnover: Multifamily property tenants tend to occupy units for shorter periods compared to single-home tenants, resulting in increased marketing costs to attract new tenants.
  • Tenants Neglect Property: Wear and tear on multifamily properties can be greater, requiring more repairs between tenant occupancy.
  • High Cost of Maintenance: Major maintenance issues can be more expensive as multiple units are affected, causing higher repair costs compared to single-family homes.

Consider these pros and cons to determine if investing in a multifamily property aligns with your investment goals and resources.

Renovating a Multifamily Property

In some cases, multifamily properties may require renovations before putting the units on the market. These renovations might involve ensuring the units meet code requirements and making cosmetic fixes to attract tenants. While managing a multifamily property renovation might be more challenging than a single-family home renovation, the potential returns make it a worthwhile investment. Seek the assistance of trusted contractors to handle repairs and upgrades effectively.


Buying a multifamily property with no money down is possible by thinking creatively and exploring alternative financing strategies. Leveraging your network, considering equity shares, and exploring financing options like hard money or seller financing can help overcome the barrier of a down payment. Additionally, crowdfunding, partnerships, and utilizing material sales or repair allowances can also provide avenues for financing multifamily properties. Remember to conduct due diligence, consult with professionals, and choose strategies that align with your investment goals. With careful planning and execution, multifamily property investments can be a profitable venture in the real estate market.

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