Seller financing

[Gen1GT]

I have a deal that would make a great seller financing transaction. They have already moved, and still own the home. It`s structurally sound, and just needs a lot of elbow grease and asthetic upgrades. I`ve never done a seller financing deal, so I would appreciated some clearification on a few things, if anyone has experience on the topic.

My first question is with deed subordination. If I get a 75% mortgage, which my lender will required any other mortgage to be subordinate, can the seller still get a 25% mortgage to cover the rest?

Or, should I just ask them to hold their current mortgage for as long as it takes for us to refurbish and sell the place, while we pay the mortgage for them? Perhaps a larger deposit will be in order? Then, we could do a double closing in 4 months or so?

Any feedback would be greatly appreciated.

 

[GaryMcGowan]

I do not think any first lenders will allow you have a 25% VTB.
I think keeping them on title and mortgage is the best case here. Providing there is enough cash on the table for you to cover all your costs and be willing to hold it a min 6 months.

 

[BrianPersaud]

QUOTE (Gen1GT @ Mar 1 2010, 06:41 AM) I have a deal that would make a great seller financing transaction. They have already moved, and still own the home. It`s structurally sound, and just needs a lot of elbow grease and asthetic upgrades. I`ve never done a seller financing deal, so I would appreciated some clearification on a few things, if anyone has experience on the topic.

My first question is with deed subordination. If I get a 75% mortgage, which my lender will required any other mortgage to be subordinate, can the seller still get a 25% mortgage to cover the rest?

Or, should I just ask them to hold their current mortgage for as long as it takes for us to refurbish and sell the place, while we pay the mortgage for them? Perhaps a larger deposit will be in order? Then, we could do a double closing in 4 months or so?

Any feedback would be greatly appreciated.

You can get a 25% vtb as a second. you are going to be dealing with bank rules, so each lender is different.

Try speaking to Calum Ross, www.CalumRoss.com, We were talking about a deal he`s done recently with seller financing....timely post

 

[Gen1GT]

Great, thanks for the info, guys.

 

[JimWhitelaw]

QUOTE (Gen1GT @ Mar 1 2010, 04:41 AM) Or, should I just ask them to hold their current mortgage for as long as it takes for us to refurbish and sell the place, while we pay the mortgage for them? Perhaps a larger deposit will be in order? Then, we could do a double closing in 4 months or so?
If your plan is to fix and flip, try this: Make your purchase via AFS with your first payment to start in 90 or 120 days. That gives you the opportunity to go in and do your repairs without any additional cash outlay. If they won`t go for that, try no mortgage payments by you but reimburse them when you sell. Keep your deposit as small as you can. You`re adding value to the property by doing the repairs, that shows serious commitment.

 

[Gen1GT]

What`s AFS?