Owner/Creative Financing

[Derek Dame]

Hello everyone!

I was listening to a BP podcast last night and the guest was talking about using creative financing. In the example, he used 75% bank financing, 20% owner financing, and 5% cash as a down payment. My question being, is it difficult to convince the bank to allow someone to use this strategy? This strategy would be used for small apartment buildings, 10-40 units. Would someone have to make enough money through a W-2 or 1099 to have enough debt to income to make a loan like this work? On the MF properties I have bought, the bank looks not only at the property but the purchaser’s personal financing and income. Also, would the bank take the first position on the loan and the owner take the second position?

Thanks in advance!