Putting 20% down is common for investment loans, but it isn’t the only path. Depending on the property type, your finances, and your strategy, it may be possible to buy with a smaller down payment—or even structure the deal so your cash requirement is reduced significantly.
With seller financing, the owner acts as the lender. Because terms are negotiable, you can sometimes trade a higher interest rate, a shorter balloon period, or faster payoff for less money down. Some sellers will accept a small down payment if they want steady income, need to sell quickly, or have a property that doesn’t qualify for traditional financing.
If the property is a duplex, triplex, or fourplex and you plan to live in one unit, an owner-occupied mortgage can require far less than 20% down. You’ll need to meet occupancy rules and lender guidelines, but this route can turn a future rental into an investment while keeping the upfront cash lower.
Another way to “avoid” 20% out-of-pocket is to split the required cash with a partner or use private capital. This can be structured as equity (a share of the deal) or debt (a note you repay). The key is to document terms clearly and ensure the deal’s cash flow can support repayment.
Negotiating seller credits, buying at a discount, or bundling repairs into the financing (when allowed) can lower the cash you bring to closing. In some cases, you may be able to refinance after improvements and recover capital—though timelines, costs, and appraisal results matter.
For a deeper breakdown of safer no- and low-money-down approaches, see the full guide here: https://splendona.com/guide-buy-investment-property-no-money-down-safely/.
It varies by loan type and lender, but traditional investment mortgages often start around 15–25% down. Down payments can be lower when the property is owner-occupied (such as a 2–4 unit home where you live in one unit) or when the deal is structured with seller financing or partners.
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