Seller financing on multifamily

[Marjeanne Fields]

Does anyone have experience acquiring seller financing deals? I'm nervous because we are highly leveraging this (95%). Which means no cash flow in year one. Any advice here would be helpful. Also- does seller financing effect a syndication?

[Chase Louderback]

Syndication is essentially a fancy word for raising money from a pool of investors to buy a large investment. So syndication pools the equity of the deal (downpayment or your 5% in this example) and the debt (bank, fannie mae, seller financing) are two different things.  You can even syndicate or have a capital raise for the full amount of the property.  It is just difficult for the numbers to make sense.  

So think of seller financing like any other sort of bank debt. Seller financing is nice because you don't have as many hoops you have to jump through as you would with the bank or agency debt and you can structure the loan almost anyway you want.

If you are nervous about the cash flow then you will have to really analyze the deal to make sure it makes sense and if it still does maybe you could ask for some months without payments?  Structure a couple years interest only?  Maybe you can lower the interest rate?  These are all things you can look at and discuss with the seller.  Your options are only limited by the deal and your creativity. 

Hope that helps