All Forum Posts by: Deborah Wodell

I wouldn’t recommend paying 50% upfront. It’s better to pay in segments tied to completed work milestones to reduce risk and keep the GC accountable.

Clear contracts and inspections before each payment are key.

I've had several investors recently reach out to me for funding on deals structured like this:

📌 10–20% seller financing
📌 80–90% hard money loan

On paper, it sounds like a win-win—low money down, motivated seller, and leverage. But weirdly, a good number of these deals fall apart halfway through.

Either the seller backs out… changes terms… or just ghosts.

Curious—has anyone else run into this pattern with seller-financed hybrid deals?
What’s the most common reason they fall apart in your experience?

Would love to hear your thoughts—trying to help my clients avoid wasted time.

Hi Christina!

Refinancing is usually worth it if you can drop your rate by at least 1%, especially if you plan to keep the property long-term. At 7.25%, it could make sense once rates get closer to 6% or below, depending on your equity and goals.

Hi Matt,

It’s great that you have solid experience with 1–4 unit properties—that definitely helps when stepping into 5+ units. For 7 units, you'd likely be looking at commercial multifamily financing, which is different from residential loans in a few ways:

• DSCR loans are a good option, especially if you're focused on rental income and want to avoid the income verification process.

• Most lenders will want to see:

  • A rent roll and T12 (trailing 12-month income/expenses), if available

  • Your personal financial statement or REO schedule

  • Purchase agreement (if under contract)

  • Credit report (a soft pull is usually fine to start)

  • Rehab budget, if there’s any value-add component

Loan terms will depend on the asset's location, your credit, cash reserves, and the property's debt service coverage ratio (typically needs to be ≥ 1.15–1.25 depending on the lender).

I'd be happy to walk you through what a typical DSCR package looks like if that's the route you want to take.

Hi Deonte,
For both scenarios you're considering, lenders will typically require some form of down payment or equity—100% LTV is extremely rare unless it's a very unique relationship or cross-collateralized deal.

For option A (lot + build):
A one-time close construction-to-perm loan is possible, but most lenders will want at least 20-30% down based on total project costs. They'll want detailed plans, permits, a licensed builder, and strong borrower financials.

For option B (primary + heavy reno + ADU):
You might consider an FHA 203k or Fannie Mae Homestyle loan if you're living in the property, but $150k in renovations + new ADU may exceed most primary residence renovation loan limits. You could explore combining a conventional mortgage with a renovation loan or using your own funds for part of the work.

Either way, the more experienced and financially prepared you are, the better your terms will be.

Creative approach! But just know—commercial lenders will still require 20–30% down, even with seller financing in 2nd position. So you’d likely need $280K–$420K out of pocket.

Your idea of offering $1.4M with $400K seller carry (interest-only, 5-year balloon) can work if the lender is comfortable with the structure. Some may allow it if your 1st mortgage is $1M and you're bringing enough cash to satisfy their equity requirement.

Once closed, a HELOC on the increased equity could help fund your reno—if the appraisal supports $1.4M.

This deal has potential—especially with the future development plans.

Hi Steve! That attorney fee does sound a bit high for a basic lending contract, but it depends on the complexity and if they’re including other legal services.

Starting as a private lender often means upfront costs like legal fees, but those protect you and help avoid bigger problems down the road. You might be able to find attorneys or template services for less, or use standardized loan documents designed for private lending.

Also, many private lenders build their portfolio over time, so the initial deals might not be super profitable alone but set the stage for better returns later.

Hi! Here’s a quick rundown:

House 1 (Primary): HELOC offers flexibility; cash-out refinance gives a lump sum with fixed rates. Choose based on whether you want flexibility or stable payments.

House 2 (2nd home): Usually cash-out refinance since HELOCs are harder on non-primary homes. Home equity loans can be an alternative.

House 3 (Rented investment): Cash-out refinance is typical. Bridge loans or private lenders might be options if needed.

Keep in mind lender rules on how soon you can use the funds for your next purchase.

Happy to connect you with lenders if you want!

Hi Kyle — welcome to the world of real estate investing!

Both strategies can work, but it really depends on your goals. Paying cash for a lower-priced property gives you simplicity and less risk, while using your equity as a down payment on a leveraged property lets you scale faster and potentially earn more — as long as the cash flow covers your debt and expenses.

If your goal is to grow your portfolio, leveraging your equity with smart financing could be the better long-term move. Just make sure the numbers make sense and you have some reserves.

Hi Sharon! Congrats on your first BRRRR — sounds like you've done a great job so far.

Yes, credit still plays a role even with an LLC, as most lenders look at the personal credit of the members. A refinance could work to return capital to the partner who wants out, but keep in mind most lenders will only go up to about 70–75% LTV. An 80% is rare but possible.

Local banks are worth a try since most lenders have a minimum of 75k.