Seller Finance BRRRR

[Luke Schumacher]

Quick question to any one with experience or lenders out there!

Im looking at an opportunity to buy a 3/1 brick home in Denver with seller financing. Its a shorter term though, 500k at 2.5% amortized over 30 years, with a 5 year balloon, hoping to get that balloon payment extended a bit. I plan to lightly rehab 10-15 k and rent out and should cash flow nicely with ARV of 560k or so.

My question is come time for the balloon payment I will obviously need to refinance into a more traditional bank loan, with it being a non traditional refinance coming form an owner finance situation would I need to do 20-25% down to get into a traditional mortgage or would I be able to do a normal refinance at 75-85% of LVT without a down payment.

I want to fully understand my exit strategy and be as educated as possible!

Thank so much!

[Jay Hurst]

Quote from @Luke Schumacher:

Quick question to any one with experience or lenders out there!

Im looking at an opportunity to buy a 3/1 brick home in Denver with seller financing. Its a shorter term though, 500k at 2.5% amortized over 30 years, with a 5 year balloon, hoping to get that balloon payment extended a bit. I plan to lightly rehab 10-15 k and rent out and should cash flow nicely with ARV of 560k or so.

My question is come time for the balloon payment I will obviously need to refinance into a more traditional bank loan, with it being a non traditional refinance coming form an owner finance situation would I need to do 20-25% down to get into a traditional mortgage or would I be able to do a normal refinance at 75-85% of LVT without a down payment.

I want to fully understand my exit strategy and be as educated as possible!

Thank so much!

 @Luke Schumacher   If the owner financed sell is recorded properly etc then there is not a difference when refinancing then any other kind of loan. So, a single family non-owner can refi up to 85% with no cash out or 75% with cash out. However, you will be required to show your last 12 months of payment history on the mortgage. You have to do this on ALL mortgages but most mortgages show up on your credit report so it is very easy to do so. The seller financed loan will not show up on credit so make sure you pay on time because you will have to prove it.