Using a private lender as a debt partner for down payment - how it affects mortgage
Hi Everyone!
I am a multifamily and SFH investor. I am partnering with a private investor who is coming in as a debt partner to cover the down payment. This is my first time structuring a deal this way and wondering how a bank will view that since the private lender won't be on the mortgage or the title. Lookiong for advance and appreciate any feedback. Thank you!
Best,
Matt Smith
Most Popular Reply
Is this for commercial multifamily or residential?
Probably going to be difficult to pull this off for a residential property. Will the private lender have their own mortgage on the property, or will this be an unsecured loan? If the PML will have a mortgage also, then I dont know of any lenders who are going to allow higher than 90% CLTV. The majority of DSCR lenders do not allow any subordinate debt outside of a seller carryback.
If this is an unsecured loan, then it will vary by lender on whether they allow this, although I have no idea why someone would lend unsecured on a real estate venture.