Creative Finance Q - Combining Multiple Investors in 1 Deal?

Question

Hello BP. I need some help figuring out my options in taking down this deal.

There is  triplex that I want to buy at roughly 110-120k. I have a commitment from a private money investor for 65k on a balloon loan for a but they like to have the their loan guaranteed with a mortgage. The seller may be interested in carrying back the rest of the loan. But I'm not sure how that would work.

Would that require for the triplex to have two mortgages on it, one to the private money investor and one to the seller?

If that doesn't work I can raise the rest of the funds from additional private investors but I'm not sure if I would run into the same issue. How would I work out the technical aspects of combining multiple private investors into one purchase?

Kind of lost and just want to know what is possible. Let me know!

Thanks, Ryan

Private Money, Creative Financing, Multifamily Investing, Seller Carryback Loans, Southern Indiana, Louisville,  Jeffersonville

Tom S. · Answer

@Ryan Gettelfinger  Agree with Aaron above, one investor would have to take a 1st position and one a 2nd position mortgage.  The person in 2nd position would probably ask for a higher rate, so make sure you account for that in your cash flow calculations.

Also since they're private investors, you have to agree on an exit strategy as people probably wouldn't want their money tied up for 30 years.

Aaron K. · Answer

You would have a first mortgage and a second mortgage with the first to be paid back first in the event of default, it shouldn't be an issue as long as everyone knows where they stand, but make sure you consult with an attorney especially if there are investors and not just lenders involved as there are more regulations in that realm.