I'm curious if anyone in Texas has had success with financing the down payments and/or closing costs of creative finance transactions like seller finance or "subject to", where the lender (owner/bank) would maintain first position in a non-owner occupied investment property. The goal would be 100% leverage by having a medium-term loan (~7 years) underneath the primary mortgage to allow me to scale more quickly. I've talked to lenders who offer short term lines of credit (LOC) or second position for primary occupied only. I have solid cash reserves and existing rental properties for collateral.
Lender · Wauwatosa, WI · Member since 2016 · 571 posts · 203 votes
2y
@Rob Allen there are options available to you here, including a 2nd, OR, a very unique / niche option is if you have strong cash flow for a property, you can obtain an advance against your cash flow with no liens, no appraisals, etc. This works well if a senior lender does not allow for a 2nd behind their first in particular. This works for most cash flowing properties. LTVs don't matter, its all about net cash flow after debt service and all other expenses.
Alternatively, there are lenders who allow a 2nd lien up to 90% CLTV on a 30-yr Fixed - 10% has to still be raised/brought by you. Or, if you'd consider a bridge loan, there are hard money lenders in TX who would allow a full 100% CLTV depending on the transaction. In both cases, if you want 100% financing, expect ugly terms. Don't expect you're getting the same 75-80% LTV DSCR loan and get the leverage you're seeking.