Seller Finance Downsides!

[Pierre E.]

Hey Creative Finance Peeps out there!

Renovation costs! How do you handle this in a scalable way while using Seller/Owner financing or Sub-To?  It seems you have to use your own cash? You cant use a  private money or hard money lender???  (You would have to refinance out of your seller finance deal... which is ok... but also get money out of it to pay back lender, which is the hard part!)

What are ways around this?

What are some other pitfalls and downsides to seller finance and subject to?

Any work arounds?

Would love to dialogue on this!

[Eliott Elias]

In terms of rehab cost, most lenders are not going to lend you that money if there is a first position lien on the property. You could however borrow it from the owner finance note holder, but that is a rare occasion. For subject to, the biggest risk is the due on sale clause.