Review my possible creative financing!!
Hey everyone, well I am finally ready to offer on my very first property, being a multifamily property in Columbus, Ohio.
Since I do not have the capital nor do I want to use any of my own cash anyways, my realtor and I have come up with creative financing for my first deal. He has put me in contact with a connection of his who represents a lender who will do up to 90% for me with a good rate and term. Since I have not yet found a local person or group where I live to work with to cover the rest, my realtor has suggested that we offer the current owner to hold 20% (I guess a sort of seller financing) and the other lender would then do the other 80%. The current owner would hold a lease on the land and I would pay him as well as the other lender until I could afford to pay off the current owner. This involves a triple net (or NNN lease) and I am wondering who has had experience with such a thing and what types of things I should watch out for and any problems that could arise from this type of deal?
The owner seems pretty open to creative financing so we have sent a proposal which I am waiting on a response from. If he is ok with it I will go ahead and get the three appraisals done, land, building and improvements. Its seems like an interesting way to get my first deal done using none of my own cash (other than cost of appraisals and maybe some closing costs), but am looking for any input.
Thanks guys!!