Current deal- looking for lenders who are comfortable with 20% seller financing in2nd

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Current deal- looking for lenders who are comfortable with 20% seller financing in2nd

Allison Hertzberg
Member since 2025 · 8 posts · 3 votes

Hello,

I'm purchasing a FSBO, $485k purchase price in florida, single family, investment loan. Seller is fine being in second position to the bank with a $95k note, interest only, 7 year balloon, no PPP.

Current bank i'm talking with offers great rates but still wants 15% down of my own money.

Looking for better. I've called local banks and loan officers are asking around, but not finding much.

I would've thought that the seller note would at least halve my portion for the down payment (going to STR it part of the year so need cash for furnishing etc.)

Would love some guidance on who to reach out to, or if the deal with 20% seller financing won't fly.

-Allison

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  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 667 votes
    1w

    Hey Allison, there are definitely banks out there that will be okay with seller seconds, but they will typically still want a portion of skin into the game (I see 10% - 15% typically) want lender are you working with now in FL that gave you those terms?

    [email protected]860-538-3672
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    • Frankie VozziBusiness Member
      Member since 2025 · 345 posts · 86 votes
      2d

      Allison, this is definitely a scenario I'd be willing to take a closer look at.

      The seller carrying roughly 20% in second position is an important part of the structure, and whether it can reduce your own cash requirement will depend on how the full capital stack is structured and what the lender will allow.

      I'm with Branch Lending and we work with investment property financing in Florida. I don't want to tell you it works without reviewing the deal, but I'd be happy to run the scenario by our team and see whether we can structure something more favorable than the 15% of your own funds you're currently being quoted.

      I'll send you a message as well.

      [email protected]516-888-7750
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  • Allison Hertzberg
    OP
    Member since 2025 · 8 posts · 3 votes
    1w

    i'd be happy with 10% with the above terms and investment loan. I see you're in sarasota, should i give you a call?

    0Reply
  • Jonathan Sawyer
    Phoenix, AZ · Member since 2026 · 6 posts · 3 votes
    1w

    Yes we have a process where you can take advantage of the seller second to satisfy the down payment requirement. Shoot me a DM and we can get it set up

    0Reply
  • John Leland
    Specialist · I give advice - [email protected] - I focus on states where investing is profitable, reasonably safe & secure · Member since 2026 · 70 posts · 15 votes
    1w
    Quote from @Allison Hertzberg:

    Hello,

    I'm purchasing a FSBO, $485k purchase price in florida, single family, investment loan. Seller is fine being in second position to the bank with a $95k note, interest only, 7 year balloon, no PPP.

    Current bank i'm talking with offers great rates but still wants 15% down of my own money.

    Looking for better. I've called local banks and loan officers are asking around, but not finding much.

    I would've thought that the seller note would at least halve my portion for the down payment (going to STR it part of the year so need cash for furnishing etc.)

    Would love some guidance on who to reach out to, or if the deal with 20% seller financing won't fly.

    -Allison

    A lot of banks that made it through 2008 have long memories or have heard stories about how many people walked away from similar situations. I know you wouldn't, but others did and banks are particulary funny about not losing more money. Things are tighter now than they were. That isn't to say nobody will do it, it just means you have to dig a little harder.

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  • Brandye Richardson
    Lender · Tampa Fl · Member since 2026 · 18 posts · 6 votes
    1w

    On a $485,000 purchase, the proposed $95,000 seller note represents approximately 19.6% of the price. The challenge is not simply finding a lender that accepts second-position financing; the first lender must approve the fully disclosed combined capital stack and may still require a minimum borrower contribution. Portfolio banks, local banks and private or bridge lenders may offer more flexibility than a conventional investment program. The key documents will be the contract, proposed seller-note terms, expected rent, property value, credit profile, liquidity and exact amount of personal cash available

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  • Bryce Axelrad
    Houston, TX · Member since 2025 · 34 posts · 11 votes
    6d

    Allison, going from 15% down to 10% would keep another $24,250 in your pocket on that purchase. I’d compare the full cost of getting that flexibility, including both loan payments and the cash you still need for furnishings and reserves.

    As a lender, the other thing I’d focus on is the seven-year balloon. With interest-only payments, that $95k seller balance isn’t being paid down. I’d want a plan for it that doesn’t depend entirely on getting a refinance later. The lower cash requirement can help now, but I’d look at the whole structure before giving up a good first-loan rat

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    6d

    If the seller is OK with being a subordinate lien, you should be able to get to 90% CLTV with the primary lender being in 1st position.

    [email protected]818-269-7983
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  • Ryan Blindt
    Huntington Beach, CA · Member since 2026 · 2 posts · 0 votes
    5d

    Ask lenders specifically about "subordinate financing allowed" and the max combined LTV. Some DSCR programs allow a seller second but still require 5–10% of your own funds; others don't allow seller seconds at all, which is likely what you're hitting. Also confirm whether they'll underwrite it as a long-term rental or use short-term rental income. I do DSCR investor loans in Florida and can check which programs accept your structure if you message me.

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    2d

    Allison, I’m from Florida as well, and I think the seller financing piece is worth exploring rather than assuming the deal won’t work. The biggest hurdle is probably going to be the first position lender being comfortable with the $95K seller note sitting behind them. The lender will want to understand the combined leverage, the seller note terms, and exactly how the second position is documented.

    I'd also separate the question of whether the structure is financeable from whether the property itself works. Since you're planning to operate it as an STR for part of the year, I'd want the numbers to work under both the STR and longer term rental scenarios rather than depending entirely on the higher STR revenue.

    I'd also look at the after tax cash flow, not just the pre tax numbers. The financing structure, interest expense, depreciation, furnishings, repairs, and other operating expenses can all affect the actual return you keep after taxes. If you plan to materially participate in the STR, the tax treatment can also be very different from a traditional long term rental depending on the facts. And I'd be careful about using all of your available cash for the down payment just to get the deal closed. If the property needs furnishing and additional operating reserves for the STR, keeping liquidity can be just as important as getting the lowest possible cash requirement.

    The seller note could potentially make the capital stack work better, but I’d have the lender approve the exact structure before getting too far into negotiations. Feel free to DM me, I’d be happy to send over our Turn Key Rental Analyzer so you can model the bank loan, seller financing, cash required, and different rental scenarios side by side.

    [email protected]941-914-7779
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  • Claudia Hawkins
    Member since 2026 · 6 posts · 1 vote
    12h

    Are you the borrower?

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  • Adam Summerer
    Lender · Franklin, TN · Member since 2026 · 55 posts · 6 votes
    1h

    Seller seconds on investment deals get rejected a lot because first-lien desks care about total CLTV and how much of your own cash is in — if the bank still wants ~15% borrower funds, that's them protecting min contribution, not misunderstanding the $95k IO. For part-year STR, confirm the first lien will underwrite STR income at all (not every DSCR desk does) before you chase "seller-second friendly" shops. Price the stack all-in: first rate/points/prepay + second IO/balloon, and have an exit before year 7.

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