Hard Money Deal Structure

[Brian Morgan]

Hello All,

Looking at my first Fix and Flip and looking for some information on how a hard money deal is structured, when a seller takes back financing.

The HML I would use only lends in first position.

The deal looks like this:

ARV: $250,000
Purchase: $100,000
30,000 Down - HML
70,000 Seller Finance
Repairs: $50,000

Question is does the HML get a First Mortgage for only $30,000 or do they get a First for $80,000?

I'm thinking it is attractive to the HML because their risk is minimized at only 32% LTV. However might be tougher to convince the Seller if he has to take a 2nd behind an $80K first?

Any advice on how to write this offer would also be helpful. Still a Newbie and learning as I go.

Thanks in Advance!

Brian