Any banks that allow seller financing as equity?

4 Replies

I have a question. I been negotiating with the owner of a commercial property. It cash flows very well and the owner wants to sell due to his age. I was going to use my own equity, but then he wanted a higher price. So he threw out the idea that he could seller finance the whole equity portion. I was wondering are there any banks out there that would accept this piece as equity or downpayment. The property is $3.7 million. He is willing to seller finance 750k. Are there any conventional/private lenders that would provide the remainder. I am fine with full and personal guaranty. Also I have a very good net worth and specialize in these properties. The property has NOI of $400k, and located near DC in a nice area.

I can't see the owner going for it unless he is cracked. The bank is going to want first position on the note, which leaves the seller at your mercy of losing his property if you don't make the payment. The bank might not care who has 2nd position, but the guy that owns it should.

The seller doesn't care. He made it clear with me and knows about his position. He benefits because he doesn't want to manage and his seller financed cash will yield a moderate interest rate for him.

Have you ever considered a master lease option?

Is there room to raise rents, lower expenses, or pass along portions of utilities to tenants?

If you can do any of the above you can increase NOI and force appreciate the property so that when you exercise option, their will be enough equity so that you can refi with a commercial lender, pay back owner, and have little to no $ out of pocket for dp.

It's a hotel, so no leases or tenants. Just want to know if there are any banks or private lenders that could do it.