Seller 2nd
ok, I have an accepted offer on an 8 fam in a prime NYC n'hood & the seller is motivated (if it's not delivered vacant seller will "accomodate"
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My question is, what are the terms you veterans use when the seller holds a 2nd? The goal is to come out of pocket with next to nothing (fogiveable 2nd even better) because I need to renovate before I can rent.
Are you referring to a 'piggyback' second?
[addsig]
No I wasn't, but I thank you for asking b/c I looked into the piggyback & learned something new
I'll take that info also.
I mean the seller holding a 2nd mortgage. What would the terms be re: payments (can they be deferred for let's say 24 mos) with interest acrruing & payable after X mos to mature on X date. I'm looking for the actual payment terms for a 2nd mortgage so I can maximize my cash flow until the building is up & running. The seller is motivated because there are some tenant isues, shoddy upkeep & the market is on fire in NYC.
Work backwards from the numbers.
What sort of structure would you need so that you can get the work done and the rents sorted? Design the 2nd's cash flow to match what you need to make the deal a safe and solid deal. Explain to the seller that if you can not make the cash flow work they stand a risk of getting the property back (when you default on the 2nd).
Forgivable 2nd? - Watch out on this one. Very easy to find out that you are committing loan fraud if you and the seller work up a deal that after the new 1st is in place the 2nd goes away. Put it this way, if the lender knows that the 2nd is to be forgiven will they still make the loan?
John
[addsig]