Finding The Other 20%
I'm trying to find a way to buy a property with close to 100% LTV. I'm not looking for any specific lender or investor, i'm looking for IDEAS on how to find the other 20% (read again...not advertising)...
I've got a property i'm trying to buy. The owner is willing to take a contract for 80% of the sale price, i've never purchased a property like this before. I was wondering what sources are available for this additional financing. I.e. the other 20%.
I'm not an expert by any means. However, a few years ago I was looking at a house that was rundown and I didn't want to go thru all the motions of conventional financing if the structure itself wasn't going to qualify. Owner volunteered 90% financing. As I just started my business, all my assets/cash/etc was tied up. What I found, was that getting a 2nd was next to impossible. However, your best bet is to turn it around and ask the seller for a smaller % and have him hold a 2nd. It shouldn't be that hard a sell since he'll end up with more cash at closing from whoever you obtain your 1st mortgage from.
Good luck!
From what i've seen, on a 4-unit, nobody will let you go above 80-90% on an overall LTV. He would easily carry just 10-20% as a second, but I'd have to find a bank that would allow 100% LT V, which I can't find.
As a recovering Mortgage Broker
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2-4 unit properties are really tough. In fact, I felt there was a serious lack of decent loan products for multi units even when you had an ideal borrower.
The problem is that these properties fall between residential (where the borrower's creditworthiness matters) and commercial (where only the property's income generation matters).
Here's where "who" you know may help. Try a few small, local banks - hopefully anyone you may have a past relationship/history with. Otherwise, you'll want to go subprime because they tend to be more flexible on high LTV's.
Best of luck!
if the seller is willing to hold a large second why not get a private money 1st for say 40-50% and have the seller take back that 2nd mortgage
as long as its a make sense deal, most privates feel they are safe with a low -low LTV on a 'no-money' deal. expect to pay in the 12-14% range w/ 4-5 points.. but hey that is coming out of the property -not your pocket
Tell us more about your situation. Whats your credit look like? Whats your personal financial statement got? There are a couple of dozen answers to this question. Unfortunately the devil is in the details.
I've got a 700 FICO, wife has a 730, purchase price will be around $200,000, D/E ratio is high, around 60%, but i'm not allowed to claim my bonuses yet (2yrs employment requirement) which make up about 1/2 of my income.[ Edited by rmdane2000 on Date 05/18/2004 ]
Interesting - so I could approach a seller and he could hold 80% of the loan and be second to a mortgage that holds 20$ of the loan and is a 1st on the mortgage?