NE Ohio lenders that allow a seller second on 20-60 unit multifamily?

Question

I’m buying 20-60 unit apartment properties in Lorain County and west Cleveland, and I’m looking for a lender that will let a seller-financed second reduce the cash I bring to closing.

I’ve seen a lot of creative finance deals done with 5-10% down where the seller carries part of the price, and I’d like to find who’s actually lending that way in Northeast Ohio. Ideal structure is around 70% bank loan, 20-25% seller note behind it, and 5-10% cash from me.

Most local banks I’ve talked to want 25-35% cash no matter what, and won’t let the seller note count toward equity. A couple have been open to a seller second, but still want the full cash down.

If you’ve closed a multifamily deal in Northeast Ohio with this kind of structure, which bank, credit union or lender did you use? And what did they require (rate, amortization, how they underwrote the seller note)?

Appreciate any names or experiences.

James Wise · Answer

If you own other properties you can get the seller to place notes on those. I've done that on a few apartment buildings before. Worked great.

Mike Farr · Answer

Appreciate this Ashish, great points on structuring and tracking the note. Will DM you.

Mike Farr · Answer

Thanks James, great idea, appreciate it. Sending you a DM

Ashish Acharya · Answer

Mike, that 70% bank / 20–25% seller note structure is interesting, especially if the seller is willing to sit behind the first lien. I’d look beyond just whether the lender allows the structure and compare the total cost and risk of the capital. The seller note rate, amortization, balloon, prepayment terms, and how the bank treats that second position can make a big difference.

I’d also get the seller note documented very clearly from the beginning. The principal, interest, payment schedule, and use of the funds should all be easy to trace in your books. On a multifamily acquisition, I'd want the acquisition costs, financing costs, and interest tracked separately as well.

From the tax side, the interest and acquisition costs need to be handled based on the actual structure and use of the property, so I wouldn't treat all of the financing costs as interchangeable.

If you can get the leverage to work without leaving yourself too thin on reserves, seller financing can be a useful tool. I'd just make sure the deal still works if stabilization takes longer or the refinance doesn't happen on the timeline you're expecting.

Feel free to DM me, I’d be happy to send over a few resources that might be helpful.

Jiao Liu · Answer

Straight answer: most senior lenders cap the combined leverage — they'll allow a seller second on paper, but they still underwrite your cash as what counts, which is why you keep hearing 25–35% down. The deals that do close at 5–10% cash usually have the seller note fully subordinated with a standby period — no payments on it for the first couple of years — and even then it's mostly small portfolio lenders, case by case. If you have a specific property in play — price, units, current NOI — send it over. I'll shop it against the multifamily lenders I work with and tell you honestly what structure they'll actually sign off on.

NE Ohio lenders that allow a seller second on 20-60 unit multifamily?

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