80/20 Investor Loan w/ Seller Carryback

Private Lending & Conventional Mortgage Advice
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80/20 Investor Loan w/ Seller Carryback

Blake Cory
Temecula, CA · Member since 2017 · 4 posts · 0 votes

So two part question. We have identified a property and agreed on terms where we'll get a 1st mortgage either through traditional financing or private through hard money. The seller is going to carry a 2nd mortgage for 15%-20% of the purchase price. Question (1): Will traditional lender or private lender (i.e. Hard Money) allow the seller to do this? (2) If so, can I get a referral please.

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  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    9y
    1) most don't "Want" you to do that (the whole "skin in the game" concept) 2) private money is going to be less concerned 3) I've done loans like this but as you're sort of skirting around the edges of what you should do, I'd just assume not go into details. But it shouldn't be hard to figure out.
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  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    9y

    Absolutely no conventional lender would allow this scenario, no hard money lender would allow it.  Private lenders may (if they are inexperienced, or want to own the property).   

    Be careful about trying to do this or taking advice from someone who has, when trying to do "a work around" when prohibited by the lender.  To sign that you are providing the down payment, and then working out some arrangement or the seller to provide said down payment by taking an inferior lien, or any other method, is not "sort o skirting around the edges", it is mortgage fraud.

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