Posted by Ryan on August 05, 2003 at 13:01:15:
If you have 10% down then there are lendors that will do 10/10/80 loans where the seller also carries back 10$ in a second position. If the seller is will to take a very low interest rate it would be worth while havimg them take more back as a second. You did not metion if the seller is willing to be in a second position. You do not mention the current status of the property related to occupancy. The lender will look at the current vacancy rate and past vacancy rate to determine if the property can support itself with worse case vancany rates. You mention that it is a fixer upper so I would assume there are a number of units vacant. IF this is the case it is possible the bank will value it less and assume it to be high risk. I would offer this to the seller. I would put 10% down and ask her to carry the remaining balance for a period of one year while you fix the property up and get all the units to a rentable condition and occupied. One years should be enough time to get this done. Then tell her that you will refinance the property at the end of a year but request that she still carry a portion of the loan back as a second.