Houston, TX · Member since 2009 · 48 posts · 11 votes
Setting aside the inherent risk of high leverage, here is my story:
I have a situation where an outright owner is willing to do 80% financing; however I don't have enough capital to bridge the gap :cry:
Is there any way to convert his offer of 80% owner finance to loaning 25% of the purchase price as a second and getting "convential" financing for 75%?
If so, does the lender look at seasoned funds for commercial transactions, etc?
Assuming the economics work at the debt load, what other questions related to this financing arrangement should I be asking?
Just trying to figure a way to use his willingness to bridge a capital gap.
No, there is not a way. Perhaps in the past it would be ok, but today, banks are very leery of letting investors in a deal with no skin in the game. Normally a bank will want to see where the 2nd mortgage is carried and the terms.
If you can't show money down, they will require you to have a minimum of 10% into the deal. So for instance if your buyer is willing to do an 80% loan and you somehow negotiate that he carries 20% privately, the bank will still require a minimum of 10% down, credentials dependent.