seller financing or hard money loan

[Jasmine C.]

Hello, I have a friend that is trying to sell her house.  she doesn't speak English well and has been trying to sell her house for several years now.  she doesn't seem to trust realtors and has backed out of selling several times. Her house is slowly falling apart but doesn't need major repairs.  mostly a REALLY good cleaning and paint.  I would like to purchase it from her and flip it.  unfortunately the home is in Hawaii and it will cost me around 750K to buy from her but the last home like hers on her street sold for 860K in February so I have a cushion.  how do I come up with the funds?  she has a 500K mortgage so I don't know how that works with seller financing.  her ex husband (not a good break up) needs to sign and he gets a portion so it gets slightly complicated.  I have never raised private money before but I know I could get 300K but not sure if I would be able to raise 750K on my own.  would a hard money lender be willing to lend to someone who has never flipped?  I am a buy and hold investor so flipping is an entirely different world to me.

[Michael Borger]

A hard money lender would prefer to see experience, but equity in the asset (collateral) is more important. Regarding the structure of the deal itself, if both sellers are willing, you could structure it with seller financing, ex. Buy it for 750k with a 500k HML loan and they carry 250k in second position at an interest rate you negotiate (if any).

Of course, this all assumes it's an actual deal. You didn't mention if the home that sold for 860k was renovated or in fixer upper condition -- it makes a big difference if you're proposing to buy the house at 750k.