Can You Buy an Apartment Complex With No Money Down?
You can buy an apartment complex without putting your own money in as the down payment, but nobody buys one with no money at all. Lenders lend part of the price, and the rest, the equity, has to come from somewhere: investors who join you in a syndication, a seller who finances part of the price, an existing loan you assume, or a partner. Even then, the sponsor usually pays the earnest money deposit and due diligence costs from their own pocket before closing, and can lose them if the deal falls through.
This guide shows where the equity comes from in each route, what a sponsor still pays before closing, a sources-and-uses table for a hypothetical 40-unit deal, and the risks that "no money down" pitches leave out.
Why can't you buy an apartment complex with no money at all?
Because lenders do not lend the whole price. Fannie Mae's conventional multifamily term sheet lists a maximum LTV of 80% and a minimum DSCR of 1.25x (Fannie Mae); Freddie Mac's small-loan sheet allows 75% to 80% depending on term (Freddie Mac). On top of the price there are closing costs, loan fees, reserves and usually a renovation budget, none of which the senior loan covers in full.
So "no money down" really means "none of my money down". The question is who provides the equity, and what they get in return.
Where does the equity come from?
| Route | Who provides the equity | What the sponsor gives up | Main risk |
|---|---|---|---|
| Syndication | Passive investors buy interests in the deal company | Most of the profit goes to investors; the sponsor earns fees and a share of profit | Securities law duties; a failed raise |
| Seller financing | The seller carries part of the price as a note | A second payment, often with a balloon | Refinance risk at the balloon; senior lenders may not allow it |
| Loan assumption | The seller's existing loan stays, so less new money is needed | An assumption fee and lender approval; often more equity if the old loan is small | The loan's terms and maturity are fixed |
| Partner | A partner with cash funds the equity | Ownership and control | Disputes; the partner may also be a securities investor |
| Master lease with option | The owner keeps title while you operate and later buy | You pay the owner; you build no equity until you buy | You may not be able to finance the purchase later |
Each route is covered in more depth elsewhere: seller financing, assuming the seller's loan, and the rest of this post for syndication.
One caution on seller financing behind an agency loan: Freddie Mac's small-loan term sheet says "hard subordinate debt is not permitted," so a seller second secured on the property would not fit behind that loan.
What does a sources-and-uses table look like with no sponsor equity?
Here is a hypothetical 40-unit building at $4,000,000 ($100,000 a unit), bought by a syndication where the sponsor puts no equity into the deal. All numbers are hypothetical, for illustration only.
| Uses | Amount |
|---|---|
| Purchase price | $4,000,000 |
| Closing costs and title | $80,000 |
| Loan fees and lender reports | $45,000 |
| Renovation budget ($8,000 a unit) | $320,000 |
| Operating and capital reserves | $120,000 |
| Repay sponsor's pre-closing third-party costs, at cost | $25,000 |
| Repay sponsor's earnest money, at cost | $80,000 |
| DoorRaise closing fee (only because the deal closes) | $5,000 |
| Repay sponsor's DoorRaise setup fee | $1,500 |
| Total uses | $4,676,500 |
| Sources | Amount |
|---|---|
| Senior loan (75% of price) | $3,000,000 |
| Sponsor's earnest money deposit, credited to the price at closing | $80,000 |
| Equity raised from investors | $1,596,500 |
| Total sources | $4,676,500 |
How it adds up: $3,000,000 + $80,000 + $1,596,500 = $4,676,500. The earnest money appears twice on purpose: the seller credits it toward the price, and the deal company then repays the sponsor from the money raised. Net, investors fund all the equity and the sponsor ends closing day with its pre-closing money back. For how to build this table for your own deal, see sources and uses.
What does the sponsor still pay out of pocket?
Before there is any investor money in escrow, the sponsor carries these costs. Using the same hypothetical deal:
| Before closing | Amount (hypothetical) | Back at closing? |
|---|---|---|
| Earnest money deposit (2% of price) | $80,000 | Credited to price, then repaid to the sponsor from the raise |
| Inspections, property condition and environmental reports, appraisal | $25,000 | Repaid at cost from the raise |
| DoorRaise setup fee | $1,500 | Repaid by the deal at closing by default; the sponsor can turn that off |
| Your time, travel and any legal advice you buy | Varies | Not repaid unless the documents say so |
| Cash at risk before closing | $106,500 plus your own costs |
DoorRaise's standard offering documents say exactly this: the sponsors pay the earnest money and third-party costs before closing from their own funds, no investor money is used for them, and at closing the company repays them at cost, with no interest or markup, only as the final closing statement shows. If the offering does not close, the sponsors bear those amounts and nothing is charged to investors.
The downside case. Suppose the raise falls short or the loan is not approved after the earnest money has gone hard. The sponsor may lose the $80,000 deposit, depending on the purchase contract, plus the $25,000 of reports and the $1,500 setup fee. That is $106,500 gone, with nothing to show for it but experience. See earnest money and the letter of intent for how to protect the deposit with contingencies, and how much money you need to start as a sponsor for a fuller budget.
Does the lender care about the sponsor's own money?
Yes, even when investors fund all the equity. Lenders look at the people who control the borrower and sign the carve-out guaranty. Greystone's Fannie Mae small-loan term sheet, for example, asks for net worth equal to the loan amount and liquidity equal to 9 months of principal and interest (Greystone). On the $3,000,000 loan above, at a hypothetical 6.25% on 30-year amortization, 9 months of payments is about $166,000.
If you do not meet that yourself, the usual answer is a co-sponsor or key principal who does, in exchange for a share of the sponsor's profit. See co-sponsors and key principals, which also covers who signs the loan guaranty.
What are the risks of the "no money down" pitch?
- It hides the pre-closing risk. Someone pays the deposit and reports. If it is you, you can lose it.
- It ignores securities law. Taking investors' money for a property you will manage is a securities offering. It needs an exemption, usually Regulation D, with filings, disclosures and limits on who you can ask.
- It encourages too much debt. Stacking seller notes and high leverage to avoid raising equity can leave a building that cannot cover its payments in a bad year.
- Investors notice. Many investors ask whether the sponsor has money in the deal. You do not have to, but you should be ready to explain how your interests line up with theirs.
- Your fees are disclosed. Whatever you earn as sponsor goes in the offering documents, and investors compare it with what you put at risk.
How DoorRaise fits in
DoorRaise is built for the syndication route. You publish a deal page, share it with your friends and followers, and verified accredited investors commit and wire into escrow at Enterprise Bank & Trust, an FDIC-insured bank. DoorRaise forms the deal's LLC, prepares the offering documents from your inputs (including the repayment of your earnest money and pre-closing costs at cost), files Form D and verifies accreditation for 506(c) deals. Fees are $1,500 to set up (non-refundable, and repaid to you by the deal at closing unless you turn that off), $5,000 at closing (only if the deal closes) and $3,500 a year, with no percentage of your raise.
Raise your apartment deal from the people who already follow you.
DoorRaise is built for apartment buildings with 5 or more units: one link for the deal, escrow until closing and a standard fee card.
Use the raise planner to size your raise, then start your deal.
FAQ
How do you buy an apartment complex with no money down?
You use other people's equity: investors in a syndication, a seller who finances part of the price, an assumable loan, or a partner. The lender still lends only part of the price, and the sponsor usually funds the deposit and due diligence before closing.
Can I buy an apartment complex with no money down?
Not with no money at all. You can avoid putting your own money in as equity, but you will usually need cash for earnest money, inspections and reports, and a lender will check your net worth and liquidity or a co-sponsor's.
Can you buy an apartment building with no money down using seller financing?
Seller financing can reduce the equity needed, but sellers rarely finance the whole price, and some senior lenders do not allow a seller loan behind theirs. Plan for the balloon payment.
Does the sponsor have to invest in their own syndication?
No law requires it, but many investors ask, and lenders test the sponsor's balance sheet. Whatever you decide, disclose it.
What happens to my earnest money if the raise fails?
That depends on the purchase contract. If the deposit has gone hard, you may lose it. In DoorRaise's standard documents, investors are never charged for it if the offering does not close.
Sources
- Fannie Mae Multifamily, Conventional Properties term sheet
- Freddie Mac Multifamily, Optigo Conventional Small term sheet (4/26)
- Greystone, Fannie Mae Small Mortgage Loans term sheet (2025)
This article is general information, not legal, tax or investment advice. Talk to your own securities attorney and lender about your deal. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.