Using a private lender as a debt partner for down payment - how it affects mortgage

[Matt Smith]

Hi Everyone!

I am a multifamily and SFH investor. I am partnering with a private investor who is coming in as a debt partner to cover the down payment. This is my first time structuring a deal this way and wondering how a bank will view that since the private lender won't be on the mortgage or the title. Lookiong for advance and appreciate any feedback. Thank you!

Best,

Matt Smith

[Patrick Roberts]

Is this for commercial multifamily or residential? 

Probably going to be difficult to pull this off for a residential property. Will the private lender have their own mortgage on the property, or will this be an unsecured loan? If the PML will have a mortgage also, then I dont know of any lenders who are going to allow higher than 90% CLTV. The majority of DSCR lenders do not allow any subordinate debt outside of a seller carryback.

If this is an unsecured loan, then it will vary by lender on whether they allow this, although I have no idea why someone would lend unsecured on a real estate venture.