Using HML in a subject-to transaction
Will Hard Money Lenders work with buyers on subject-to deals? I ask because I have two subject-to deals on the vine, one I'm closing next week and the other shortly after. I don't have enough cash to do both. I was wondering if bringing in a HML would keep me from using all of my cash.
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I co owned a hard money lending company for 10 years and we would not be willing to be in 2nd position behind an institutional lender.
That said, I buy sub to property myself and when I need cash to rehab or catch up defaulted loans, I like to bring in private money and make it appealing to that person. Often I will structure a participation note/mortgage. I will pay the private lender a percentage rate as well as part of the equity in the deal. My investors really like this structure.