Ed, Question About Owner Finance? - Posted by Gerald

Posted by Michael Morrongiello on February 13, 2001 at 17:32:43:

Just because the owner is willing to carry back a portion of your sales price in the form of a smaller subordinate 2nd lien does not absolve you from putting at risk a cash down payment on your behalf.

Given your credit scores, It very well may be feasible to obtain 100% financing on this rental investment home purchase, however it all likelihood, the lender if they make such a loan will charge you an “off market” interest rate and want to limit their exposure to somewhere around 80% - 85%.

If you have the cash to put down, (like 5% or more), then it might make sense to see how motivated and flexible this seller really is?

You can ask them to carry back (2) two mortgages and notes. An 80% LTV 1st lien, along with a smaller 10% -15% +/- 2nd lien. The 1st lien can then be converted into CASH through the owner SELLING it at the time of closing.

To your success,
Michael Morrongiello

Ed, Question About Owner Finance? - Posted by Gerald

Posted by Gerald on February 13, 2001 at 13:25:52:


I have found a duplex, owner is willing to take back a small (10%) second on. The bld. is a 2 unit. price is 70000. Rent is 450/unit. Good area by a college. My credit is 748.

My question is regarding how to do this. Don’t most banks want the down money to be out of your pocket? Actually I have been using a mort. broker. Is there a way to structure this so that they won’t mind me having a second. I have the money to put down, but if owner is willin to help, I might as well let him.