Rules when owner carries a second note?

[Daniel Dietz]

Hello,

I am in the very early stages of talking to a couple of different property owners about the possibility of buying their existing rental properties and them carrying part of the total purchase price as a 'second note' (assuming other lenders would only want to lend in the first position.

These properties range from 6 to 8 units owned free and clear, a 6 unit with about a 40% LTV loan on it, and some single families that range from free and clear to 80% LTV loans.

These could be done in a SDIRA, or not, depending on the benefits to each way. I am wondering if the non-recourse loans in SDIRA might be for flexible.

An example I am wondering if work might be as follows; on the free and clear propensities, could I get a loan for say 70%, have the owner carry 20-30%, and me come in with 0-10%.

On a single family, with say a loan to at 70% LTV, could I get a loan at that same 70% and have the owner carry the other 20-30% with me coming in with 0-10%?

The reason I think the owners might be interested are that they would like to get out of the day to day of it due to age, and they find the possible tax benefits of carrying part of the loans appealing instead of getting all the cash at once. I also have long term business and friendship connections with them, so there is a strong level of trust.

Thoughts? Thanks, Dan Dietz