Delayed financing with OPM

[Ian Kisbert]

When using delayed financing, is it possible to do so using other people's money? Looking into lending guidelines it seems like the bank may not like being in second lien position, but it also sounds like others use this method along with other peoples money. My plan would be to put some of my own money into the deal, along with private money to purchase and rehab a property (putting purchase and rehab on HUD), then using delayed financing, pull out cash to pay back the private money, and if I leave a little of my own in the deal, that's ok with me. If I go this route, how do I structure the private money to satisfy the lender in terms of how I got the money, and how they will keep first lien position?

[Kathie Riedel]

I am a private lender and my friends borrowing from me do this all the time. I will lend them the money to purchase the property. I am in first position When the rehab is finished the borrower will go to the bank and refinance and pay me off. The bank loan is now in first position.