SouthCoast Properties · Investor Resources
Deal flow usually isn’t the hard part — the down payment is.
Here’s a full field guide to where investors actually find that capital, from equity you already hold to people, programs, and other deals.
13 min read•Investing & Financing
Every real estate investor hits the same wall eventually: you’ve found a good deal, the numbers pencil out, and the only thing standing between you and closing is the down payment. It’s consistently the top obstacle landlords report when asked what’s holding them back from their next purchase — not deal flow, not market conditions, just cash.
The good news is that a down payment doesn’t have to come from a single source, and it doesn’t always have to come out of pocket in the traditional sense. Below are 32 ways investors actually raise the capital, organized by where the money comes from — equity you already hold, accounts you already have, how you structure the deal itself, other people, other deals, assistance programs, and plain old saving discipline.
How Much Are We Actually Talking About?
Down payment requirements vary by loan type, but as a general range, expect to need 15–30% of the purchase price for an investment property (owner-occupant house-hacking is the exception — more on that below).
Conventional mortgages sit at the lower end, usually a 20% minimum, but come with tighter underwriting: strong credit, verified income, cash reserves, and 30–60 day closings. Below 20% down, you’ll also pay private mortgage insurance. Conventional lenders are also strict about where your down payment comes from — they want your own seasoned savings (typically sitting in your account 60+ days), which rules out several of the strategies below if you’re using this type of loan.
Portfolio loans — kept in-house by community banks or investment-property lenders rather than sold off — typically run 15–30% down, close in 14–30 days, and focus more on the deal and the property than your personal income. Many don’t require income documentation, don’t impose seasoning rules, and don’t restrict where the down payment comes from. The tradeoff is usually a somewhat higher rate and more up-front fees.
Don’t forget the rest of the cash to close
Lenders typically require reserves — one to six months of mortgage payments, sometimes calculated across all your existing loans — plus closing costs that easily run into the thousands. The down payment is only part of what you need at the table.
Equity You Already Have
01 HELOC on Your Primary Residence
A home equity line of credit against your primary home is one of the most common ways investors fund a down payment. Draw periods typically run 10–15 years (often interest-only), followed by a 15–20 year repayment period. Conventional lenders generally won’t accept a HELOC-funded down payment, and the added debt affects your DTI — but portfolio lenders are usually fine with it.
02 Equity Line Against an Existing Rental
If you already hold equity in another rental, you can open a line of credit against that property instead of your home. Expect a lower maximum loan-to-value ratio and a higher rate than a HELOC, since lenders view investment property debt as riskier — but it’s a real source if your home equity is already tapped.
03 Cross-Collateralization
Sometimes called a blanket loan: instead of a cash down payment, you offer a lender a lien on another property you own (free and clear, or with substantial equity) as additional security. The lender now holds two properties against one loan, which can be enough for them to waive or reduce the cash-down requirement.
04 Cash-Out Refinance on an Existing Property
If a property you already own has appreciated or been paid down significantly, refinancing it and pulling the difference out in cash is one of the cleanest ways to fund your next down payment — you’re using proven equity rather than taking on a second lien.
05 Home Equity Investment Agreements
Companies that offer home equity investments (Hometap, Point, and similar) pay you a lump sum today in exchange for a share of your home’s future appreciation — no monthly payment, no interest rate, and typically no new debt on your DTI. You settle up through a sale, refinance, or buyout, usually within a 10-year window. It costs you future equity, but it’s worth comparing against a HELOC if you’d rather avoid a second monthly payment while a new rental stabilizes.
06 Delayed Financing After a Cash Purchase
If you can buy a property outright in cash — savings, a bridge loan, a private lender — most conventional lenders will let you refinance and pull most of that cash back out well before the usual six-month seasoning window, under a delayed-financing exception. This lets you compete like a cash buyer on the purchase while ending up financed like any other investor, and it recycles your capital faster than a standard hold-and-refinance timeline.
Accounts You Already Have
07 401(k) Loan
Most 401(k) plans allow you to borrow against your own balance — typically up to $50,000 or 50% of your vested balance, whichever is lower — at a low interest rate you pay back to yourself. It’s not free money (you lose market exposure on the borrowed amount, and leaving your job can accelerate repayment), but it’s one of the cheapest sources of capital available to a W-2 employee.
08 Roth IRA Contributions or a Self-Directed IRA
You can withdraw your contributions (not earnings) from a Roth IRA at any time, penalty-free. If you’d rather hold the real estate inside the account itself, a self-directed IRA lets you buy investment property directly, though it takes time to set up with a specialized custodian and comes with strict rules about personal use.
09 Life Insurance Cash-Value Loan
If you hold a whole or universal life policy with years of accumulated cash value, most insurers will let you borrow against it at a fixed, relatively low rate, with no credit check and no fixed repayment schedule — the balance simply comes out of the death benefit if it’s never repaid. It’s an underused source of capital for anyone who’s held a policy long enough to build meaningful cash value.
10 Selling or Borrowing Against a Brokerage Account
If you hold a taxable investment account, you have two options short of liquidating your whole portfolio: sell a portion of appreciated holdings (accepting the capital gains hit) or take a margin loan against the account’s value. A margin loan avoids triggering a taxable sale, but carries the risk of a margin call if the market drops — size it conservatively.
Structuring the Deal Itself
11 Seller Financing
Ask the seller to carry a second mortgage instead of taking your down payment in cash at closing. Terms are negotiable — rate, length, and structure — and a balloon note (payments based on a 30-year amortization, full balance due in 3–5 years) is a common way to keep your payments low while giving the seller a defined payoff date.
12 Assuming an Existing Mortgage
Some existing loans — notably many FHA and VA mortgages — are assumable, meaning a qualified buyer can take over the seller’s original loan, often at a rate well below today’s market. Because you’re only responsible for covering the gap between the loan balance and the purchase price (rather than financing the whole purchase price fresh), the cash needed at closing can be substantially smaller than a new loan would require.
13 1031 Exchange Proceeds
If you’re selling another investment property, a 1031 exchange lets you roll the proceeds into a new purchase while deferring the capital gains tax, turning existing equity directly into your next down payment. The timeline is tight — 45 days to identify a replacement property, 180 days to close — and requires a qualified intermediary, so it needs to be planned well in advance of a sale.
14 House Hacking With Owner-Occupant Financing
Buying a property to live in — and structuring it so tenants cover part or all of the mortgage — opens the door to owner-occupant loan terms that investment properties don’t qualify for. FHA loans go as low as 3.5% down, and some conventional programs now go as low as 3%, with rental income from the other units often counted toward qualifying for the loan itself.
15 Piggyback (80-10-10) Financing
Rather than one loan covering 80% of the purchase price and a 20% cash down payment, a piggyback structure splits the financing into a first mortgage (typically 80%), a second loan (around 10%), and a smaller cash down payment (around 10%). It’s more commonly used on primary residences to avoid mortgage insurance, but some portfolio lenders offer similar structures for investment purchases, reducing the cash you need at closing.
Other People’s Capital
16 Loans From Friends & Family
Conventional lenders won’t allow a borrowed down payment, but portfolio lenders often will. Personal loans from family or close connections rarely carry market-rate interest, and depending on the lender, may not even show up on your credit report or factor into your DTI calculation. Confirm your lender allows it before you ask around.
17 Co-Investment Partnerships
Rather than borrowing from friends or family, bring them in as partners. Work out who contributes what, who handles day-to-day management, and — most importantly — agree on an exit strategy before you close: a buyout trigger, a sale timeline, or both. An open-ended partnership is the version most likely to cause problems down the road.
18 Gap Funding From Specialty Lenders
Some lenders specialize in funding an investor’s down payment directly, taking a second lien position behind your main loan (effectively lending near 100% LTV). Expect high interest, fees, or a requested equity stake in exchange for taking on that much risk. Only take gap funding if the combined payments still leave the deal cash flow positive.
19 Relationship-Based Private or Hard Money Lenders
Distinct from anonymous gap-funding companies, many investors build ongoing relationships with individual private lenders — often other investors or local professionals looking to deploy capital — who’ll fund a down payment or bridge loan on negotiated terms because they know and trust the borrower. These relationships tend to get easier (and cheaper) to access the longer your track record.
20 Peer-to-Peer Lending Platforms
P2P lending platforms match individual borrowers with individual or institutional lenders funding personal loans, sometimes at better terms than a credit card cash advance. Underwriting and rates vary widely by platform, so this tends to work best as a smaller supplemental piece of a down payment rather than the entire source.
21 Local Investor Meetup Micro-Syndication
Real estate investor associations and local meetup groups are a common, low-friction place to find one or two people willing to co-fund a single deal’s down payment in exchange for a share of the cash flow or equity — a smaller, more informal version of a syndication, built on an existing local network rather than a public raise.
Capital From Other Deals
22 Wholesaling
Put undervalued off-market properties under contract and assign the contract to another investor for a fee, without ever taking title. It’s a low-capital way to generate cash toward your own future down payment, though building a reliable buyer’s list and sourcing real deals takes real work — skills that transfer directly once you start buying for yourself.
23 Fix & Flip
Flipping one or two properties before buying a long-term rental is a common way to build up a down payment. Some fix-and-flip lenders will cover up to 90% of the purchase price on a well-appraised deal and 100% of renovation costs on a draw schedule, though you’ll need cash up front for each draw before reimbursement.
24 BRRRR (Buy, Rehab, Rent, Refinance, Repeat)
After renovating and stabilizing a property with tenants in place, refinance it and pull your original capital back out to redeploy into the next purchase. Done well, you only need to fund the first down payment once — the same capital cycles through the portfolio while rental income compounds with each new property.
25 Bridge-to-Permanent Financing
A short-term bridge loan can get you to the closing table quickly on a deal that needs to move fast, with the plan to refinance into permanent, lower-cost financing once the property is stabilized or renovated. It’s a higher-cost source of capital in the short run, but it lets you win time-sensitive deals a slower conventional loan would miss entirely.
26 Note Investing
Buying discounted mortgage notes (performing or non-performing) is its own investment strategy, but it can also generate faster capital turnover than direct property ownership — some investors use gains from note investing specifically to fund down payments on properties they intend to hold long-term.
Assistance Programs & Passive Alternatives
27 Down Payment Assistance & First-Time Buyer Grants
Most state and local down payment assistance programs are restricted to owner-occupied primary residences, which pairs naturally with house hacking. If you’re buying a small multifamily and living in one unit, a grant or forgivable second mortgage can cover part of your down payment, freeing your own cash for a future purely-investment purchase.
28 USDA and Local Rural Development Grants
For properties in eligible rural or semi-rural areas (which includes more of a given metro’s outer edges than most investors assume), USDA-backed loan programs can offer zero or near-zero down payment options for owner-occupants, alongside local housing authority grants aimed at the same areas.
29 Real Estate Crowdfunding or Syndication as an LP
If the constraint is capital rather than deal flow, investing passively as a limited partner in a syndication or crowdfunding platform — often with minimums in the $5,000–$25,000 range — keeps your money working in real estate while you continue saving toward your own down payment. You give up direct control and the same equity buildup, but your capital isn’t sitting idle in the meantime.
Everyday Savings & Discipline
30 A Dedicated Side-Income Savings Sprint
Rather than trying to trim a general budget, ring-fence one specific income stream — a side business, freelance work, overtime, a seasonal gig — and route all of it, untouched, into a down-payment-only account. Treating it as a separate sprint tends to get investors to their number faster than competing against the rest of the household budget.
31 Paying Off High-Interest Debt First
Before chasing any of the above, pay down existing credit card debt. Real estate returns rarely beat 16–24% credit card interest, so eliminating that debt first frees up monthly cash flow for savings faster than most of the strategies on this list.
32 Credit Cards, Business Lines of Credit & Personal Loans
The riskiest tools here, but real ones: personal cards run 16–24% interest plus cash-advance fees, while business credit-building services can sometimes open $100,000+ in combined business credit with a 0% introductory period. Personal loans are similarly expensive but can bridge a specific, time-sensitive gap on a flip or BRRRR deal. None of these are compatible with a conventional mortgage, since that loan type doesn’t allow a borrowed down payment — and none of them should be used unless the deal still cash flows once the payment is added in.
The Bottom Line
Most investors end up combining two or three of these — a HELOC plus a savings sprint, seller financing plus a friends-and-family loan, a cash-out refinance rolled straight into a 1031 exchange. The right combination depends on what you already own, what you’re willing to leverage, and how much risk you want to carry into the next deal.
The one rule that applies across all 32: run the cash flow numbers before committing to a funding source, not after. Leverage is one of real estate’s biggest advantages, but every one of these tools makes that leverage a little heavier. Make sure the property can carry it.
Ready to Put the Down Payment to Work?
Finding the money is only half the equation — the property still has to perform once you own it. SouthCoast Properties has been helping owners across Chatham, Bryan, Liberty, and Effingham counties turn Savannah-area rentals into reliable cash flow since 2006.
Whether you’re evaluating a specific property before you commit capital, or you’ve already closed and need a partner to handle leasing, maintenance, and day-to-day management, our team can help:
- Property investment analysis — rent comps, expense estimates, and realistic cash flow projections before you buy
- Full-service property management — leasing, tenant screening, maintenance coordination, and owner reporting once you close
- Local market expertise — four counties of hands-on experience, not a national franchise’s spreadsheet
Visit callsouthcoast.com Call (912) 925-9925
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