Can someone describe how a supplemental loan works
We are looking at a 100 unit property with an assumable loan. With the current loan we would need to raise too much capital to get a good cash on cash return so I started looking for a supplemental loan. The loan broker confused me on how this would work. I was under the impression that if you assumed the loan, you could then get a supplemental loan on top of this for some portion of the difference between purchase price and the assumable loan balance. He made it sound like this was not the case, but that the supplemental loan would replace the assumable loan. This does not help because the supplemental loan only goes up to 70%. Anyone have some insight, or suggestions?