Beginner Creative financing

11 Replies

Hi hopefully this is the correct area to post this but I have a scenario I'd like suggestions on how I can acquire it as non owner occupied. I currently house hack a duplex and need to live in it for 5 more months per FHA rules. House for sale listed at $109,000. They have verbally agreed to either $105,000 or $107,000 and 3% closing costs. As it sits house should appraise around $140,000 - $150,000 and seller is looking to sell quick and at a loss. The property is two units. Upstairs 3 bedroom single family. Downstairs commercial office/ store front. The town has it listed as multifamily and zoned upstairs residential downstairs commercial retail store. About 1400 square feet. Maybe 400-500 is the commercial. I have an interested business that will give me $20k to use as down payment if I rent to them after closing at a discount. I've talked to about 12 lenders, conventional, hard money, private lender's. All said no so far. Reasons varied from they can't because its mixed use. To much retail square foot compared to residential. They don't lend under 100k. The last one I talked to would do it for 35% down but I can't use funds from someone I'm renting to. I was thinking maybe seller financing for 1 year with 20-25k down and I could refinance after 6 months? I'd like to hold and rent the property long term. If I'm missing any information let me know thank you Personal funds I have about 9k cash. I've talked to about 12 lenders, both conventional ,

You can try seller financing.  You could also do an equity partner instead of using the renters as a renter.  Make them an equity partner.  Give them 5% equity, then let them know that in 6 months they can sign off of it and it is yours. Try that and let me know. 

@James O'Connor If seller financing option doesn't work out, you can reach out to private lenders and just bring them as debt partners for a short while until you can obtain bank financing. 

Good luck!

Originally posted by @James O'Connor :
@Michele B. Thank you for the ideas. Is seller financing literally as simple as coming to an agreement and drafting s paper to sign? Then just have an attorney do the closing?

 Well you will have to have a title search done and then yes the lawyer could do the rest or sometimes you just get the title company to do it all without a lawyer.  Come to a price agreement for the property then go to a title company or a lawyer.   

@James O'Connor You have only 9 grand and want this 107k house with likely 4 k more in closing ? You need to stack some more chips . Owner financing is wonderful if it’s done right but you need down payment money and closing fees . The seller is usually going to want atleast 10% you don’t even have that . You gotta have skin in the game or nobody is going to deal with you
@Dennis M. I completely agree, the only reason I was interested was because a small business wants to rent that spot and will give me 20k to use as a down payment. So that plus my cash seemed like I could make something work. Also I have debt free credit cards for emergency.
Update for every one. They accepted seller financing with the terms I requested. Only thing they changed was 30k down instead of 25k. Hopefully this works out! Would be my second property or 2018!