Commercial Mortgage + Seller Financing = Need Advice

[Argi Avetisyan]

Hey guys! I am trying to buy an 8-unit multifamily property. The seller has agreed to the owner finance/carry 40% of the purchase price (second position). Ideally, I would put 5-10% down and then get the remaining 50-55% from a lender/bank. The property would cash flow decently even with such a low down payment and conservative rental comps. The PP is $295,000. So far I have only purchased single-family properties so I am not exactly sure how to find financing for commercial. Any tips on how to find lenders who would allow the seller to carry a portion of the PP? I would still have some skin in the game in terms of down payment but not as much as 25-35%.

[Danté Belmonte]

Great news you are able to acquire seller financing! Start with your local credit unions, regional and local banks. Be upfront about the seller financing part and make sure they are okay with it. Seller will most likely have to take 2nd lien position as the primary lender (bank or credit union) will only make the loan if they are first lien position. Shop around to make sure you are getting the best rate and terms. Again just be up front and ask if they will allow the seller to carry a portion of the loan. DO NOT wait last minute. Good luck! 

[Justin Goodin]

This will be difficult. If I am correct, USUALLY, the seller will only be able to carry the financing if they own the property free and clear. You could get a Co Star list and find owners that have potentially owned their property for a long time. 

[Account Closed]

8-unit multifamily should definitely go with commercial lending. Talk to some lenders to see how they deal with the seller financing, different lenders take care it differently.