Colorado Springs Turnkey Flip — Exploring Hybrid / Seller-Finance Exit

OP

Member since 2025 · 3 posts · 1 vote

1mo

One additional angle I’m evaluating: a buyer bringing enough proceeds at closing to retire the existing first-position financing, with me potentially carrying part of the remaining purchase price. Has anyone recently closed a DSCR + seller-second, cash + seller-second, or another creative structure that worked well on a completed flip?

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Vijay FriedmanBusiness Member

Miami, FL · Member since 2026 · 766 posts · 122 votes

1mo

Quote from @Tamara Harris:

I'd appreciate input from investors who have actually purchased completed flips using a combination of institutional/investor financing and seller carry.

I have a fully renovated, turnkey 3/2 in Colorado Springs, 1,347 SF. The renovation and major systems are complete, but the retail listing has been on market longer than anticipated.

Rather than continuing to rely solely on a conventional retail exit, I'm exploring whether an investor acquisition could be structured with enough proceeds at closing to retire the existing first-position financing, while I carry part of the remaining purchase price.

One structure I'm evaluating is:

Buyer obtains their own investor/DSCR first mortgage + seller carries an agreed portion in second position, subject to lender approval and proper documentation.

I'm particularly interested in connecting with investors who have actually closed this type of transaction in Colorado.

If you've done one, what CLTV/down-payment range have you found DSCR lenders willing to accept when a seller-financed second is involved?

I'm also happy to share the property, photos, comps and numbers with anyone whose buy box includes Colorado Springs.

If you've done one, what CLTV/down-payment range have you found DSCR lenders willing to accept when a seller-financed second is involved? Or have you used another creative structure that worked better for a completed flip like this?

I'm also happy to share the property and numbers with anyone whose buy box includes Colorado Springs.

@Tamara Harris
The seller-financed second is going to be the key piece here. I'd confirm the structure with the DSCR lender before the buyer commits, because allowable CLTV, required borrower contribution, and treatment of subordinate financing can vary quite a bit by program. If the first lien can fully pay off your existing financing and the second is documented correctly, it's definitely worth exploring rather than assuming a conventional retail exit is the only option.

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Tamara Harris

OP

Member since 2025 · 3 posts · 1 vote

1mo

Thank you @Vijay Friedman. I will look into that. My other option is a cash/seller finance hybrid. But maybe there are other options, creatively, I'm not aware of?

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James Driscoll

Banker · MA · Member since 2026 · 120 posts · 31 votes

1mo

Good question and a structure that does get done, though the details matter a lot.

On the CLTV question: most DSCR lenders will allow a seller-carried second, but they typically want to see the combined LTV stay at or below 80%, and some draw the line at 75% if the second is institutional or seller-held. The more conservative shops treat any subordinate debt the same way they'd treat a hard money second, and they'll want the seller note documented in full before they'll issue a clear-to-close. The buyer's first mortgage LTV on a DSCR product for an investment single-family in Colorado is usually in the 70-80% range on its own, so there isn't a ton of room for a meaningful seller second before you're pushing against those limits. You'll want a buyer who either has enough cash to bridge the gap or can negotiate a purchase price where the first alone covers your payoff plus a reasonable equity cushion for them.

The structure you're describing, DSCR first plus seller second, works best when the numbers pencil on rent coverage at the first-lien amount alone. DSCR lenders typically run the DSCR ratio on the first-lien payment only, not the blended debt service, which is one reason this can still work even with a second in place. But individual lenders vary on this, and some will gross up the total debt service to test coverage, so the buyer needs to shop lenders who specifically allow subordinate financing.

A few alternatives worth thinking about: some investors structure this as a straight seller-finance with a balloon (buyer refinances into a DSCR loan in 12-24 months once they have a rent history), which sidesteps the subordination issue entirely. Others have used a lease-option as a bridge. Neither is perfect, but if a DSCR lender won't bless the second, those are cleaner paths to closing.

I do DSCR loans and am familiar with which lenders in this space are more flexible on subordinate seller seconds, so if a buyer's financing piece is the sticking point, that's a solvable problem with the right lender in their corner.

James Driscoll

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Colorado Springs Turnkey Flip — Exploring Hybrid / Seller-Finance Exit

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