Lenders + seller 2nd's = Justin B-BRRRR?

[Phillip Bernier]

I'm currently working on scaling up quickly through purchasing large SFR portfolios and/or apartments, and I'm in preliminary talks with a few sellers willing to carry back a seller 2nd note of 20-30% (i.e. the down payment).

I'm looking for a lender that will move forward in financing the initial 70-80%, in 1st position, alongside a seller 2nd of the remaining 20-30%, totaling 100% CLTV. Terms for the seller 2nd have generally been 5%, interest only, 5 years.

I'm only considering properties under this scenario that cashflow well immediately, hence the i/o payments, in addition to having a strong value-add element. The initial goal is immediate cashflow that will quickly increase as we fix-up and/or lease up the properties. The fix-up/lease-up process raises the NOI and ultimately forces a higher property value, leading to a cash-out refi within the 5-year term.

We've affectionately called this the "Sam's Club BRRRR," or "Justin B-BRRRR," as we're completing our "BRRRRs in Bulk" with many units at a time. ;)

THE ASK: Do you happen to know of any good portfolio, bridge, and/or DSCR lenders, private or otherwise, that may be willing to work with such a scenario?

Looking forward to chatting soon. Hope you've had a blessed day!

[Robin Simon]

Quote from @Phillip Bernier:

I'm currently working on scaling up quickly through purchasing large SFR portfolios and/or apartments, and I'm in preliminary talks with a few sellers willing to carry back a seller 2nd note of 20-30% (i.e. the down payment).

I'm looking for a lender that will move forward in financing the initial 70-80%, in 1st position, alongside a seller 2nd of the remaining 20-30%, totaling 100% CLTV. Terms for the seller 2nd have generally been 5%, interest only, 5 years.

I'm only considering properties under this scenario that cashflow well immediately, hence the i/o payments, in addition to having a strong value-add element. The initial goal is immediate cashflow that will quickly increase as we fix-up and/or lease up the properties. The fix-up/lease-up process raises the NOI and ultimately forces a higher property value, leading to a cash-out refi within the 5-year term.

We've affectionately called this the "Sam's Club BRRRR," or "Justin B-BRRRR," as we're completing our "BRRRRs in Bulk" with many units at a time. ;)

THE ASK: Do you happen to know of any good portfolio, bridge, and/or DSCR lenders, private or otherwise, that may be willing to work with such a scenario?

Looking forward to chatting soon. Hope you've had a blessed day!

Have you looked into a potential different structure with instead of a seller note, structure it through equity in an LLC partnership? Would probably make things a lot easier on the financing side