Lender & Seller financing with overages, how to?

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Lender & Seller financing with overages, how to?

Michael D.
Rental Property Investor · Cleveland, OH · Member since 2015 · 24 posts · 6 votes

Has anyone successfully structured lender financing AND seller financing together?

The situation I'm currently dealing with is something along the lines of the following:
i.e. the deal is 1MM, the seller finances 50%, lender finances up to 80% LTV.
I'd like to take advantage of the additional 30% the lender is giving to make repairs, have a buffer, etc...
But I'm assuming once the lender knows there's owner financing they won't finance 80% LTV anymore but less  (or just the 50%).
Things get tricky with 1st lien and 2nd lien holders I'd imagine.

Has anyone run into something like this? If so how did you structure it/make it work?


TIA!

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  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    4y
    Quote from @Michael D.:

    Has anyone successfully structured lender financing AND seller financing together?

    The situation I'm currently dealing with is something along the lines of the following:
    i.e. the deal is 1MM, the seller finances 50%, lender finances up to 80% LTV.
    I'd like to take advantage of the additional 30% the lender is giving to make repairs, have a buffer, etc...
    But I'm assuming once the lender knows there's owner financing they won't finance 80% LTV anymore but less  (or just the 50%).
    Things get tricky with 1st lien and 2nd lien holders I'd imagine.

    Has anyone run into something like this? If so how did you structure it/make it work?


    TIA!

    Almost all lenders require the borrower to have their own cash invested in a purchase.  So if the lender requires 25%, the maximum they’ll lend is 75% MINUS the amount of seller financing.  Further, the seller would be required to subordinate his loan to a first mortgage; so the seller would have to be quite motivated to take his equity in a second position loan.  Usually because he can’t sell any other way either because his price is above market value or because his property is difficult to sell.
    Private Mortgage Financing Partners, LLC
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