Seller financing issues

[Greg M.]

Hello all,

So I think I've landed my first zero down situation, or pretty closely at least. The individual I purchased my first property from is selling another just down the road, the pro forma provided is as follows:

Rent Roll

507 Clay	525
509 Clay	700
511 Clay	500
513 Clay	550

Income & Expenses

Yearly Gross Income	$27,300
Taxes	$2,403
Insurance	$1,180
Water/Sewer	$1,090
Utilities	Tenants Pay
R&M	$1,440
Total Expenses	$6,113
NOI	$21,187

I have confirmed all the expenses as far as taxes, insurance, and water go, and minus 10% management, 10% CAPEX, and increase the R&M to 10% its actual NOI should be around $16,000 before mortgage payment, estimated @ $500 a month leaving $10,000 a year in positive cash flow.

It was appraised less than three months ago for $117,000.  I asked and he agreed to provide a second note, with no lien on the property,  for the down payment if I agreed to pay the full appraisal amount.  He agreed to let me pay "whatever works" for me, I suggested around $200 a month and he agreed, leaving almost $7600 a year in cash flow.

So I have a practically zero down situation, that will put money in my pocket every month but I am stuck because the bank want lend to me. My DTI is 41%, my monthly W2 income is over $5000, my credit score is over 750 and I have $30,000 in cash and liquid funds, but still nothing. The bank wants 25% down, 6 months of reserves for all my properties (3), as well as $6000 for closing costs. They want to see nearly $60,000 in cash and liquid funds before they will give me a loan which seems a bit crazy to me.

Any suggestions?

I have heard that HML can provide proof of funds letters, should I reach out to them and see if they can provide one for me?