Is a Large Down Payment on Subject To Okay or a Better Way?

[Brandice Walters]

Hello! We just finished our first BRRRR earlier this year and are hungry for another win! :) We have a motivated seller that wants to sell us an awesome triplex that was last appraised for $240K for the great deal of what he paid for it of $180K. $60K in instant equity, yes please! So technically we could BRRRR without the renovation step. However one unit needs renovations, and after about $20K, the property should be worth at least $280K on the low end. The seller is willing to make this great deal because he needs money now. We would like to give him 10% down, $18K, and then have him give us up to 6 months to make upgrades and get the ARV even higher than it is before we do our final financing. He is happy with those terms. We were looking at doing a Subject To loan, but have never done one before. Research seems to show buyers generally do not pay a hefty down payment most of the time from what I am reading. Any heartburn reading this in offering the guy the $18K to get in on this deal and finance at top dollar later? Any suggestions on a better way to do this and get him the $18K now? Thank you so much in advance for any advice you can offer!

Price $180K

Current appraised value $240K

80% LTV with no repairs= $192K (After closing costs around $13K we would have left in the deal after $20K in renovations)

Renovations $20K

ARV $280K

80% LTV after renovations = $224K (After closing costs around $1K left in the deal)