Hi BP'ers! I tried searching on the forum and don't seem to be able to find an answer specific to mine. I have a seller willing to sell me his portfolio of 14 properties. I am currently still reviewing the tenants leases. I am trying to use some creative financing here. He told me if I want the deal, it's mine. He can introduce me to banks, who most likely do the mortgages. I know that banks don't do 100% financing. I read somewhere about this "2nd mortgage", where the buyer can ask the the seller to do a 2nd mortgage. I am not fully understanding this concept. Does this mean that I ask the seller to put up the "down payment" and I just pay him monthly with terms (sorta like a promissory note?) Thanks in advance

Thanks Jon for your input. I haven't thought about what the lender will think regarding to that. The seller is a seasonal investor and a broker, he said he can introduce me to some banks.

There's no "sorta like a promissory note". The "seller carried second mortgage" is just an ordinary second mortgage. There's a promissory note and a lien (typically a mortgage or deed of trust) attached to the property. The challenge will be finding a lender who's willing to do the first with none of your own cash in the deal. You might think "ok, a bank lends me 70%, so they should be happy." Trouble is they may think (with some justification) that you and the seller have a side agreement that the seller will just forgive the 30% second mortgage. In otherwords, you've raised the price on paper so it looks like you're paying, say $100K when in reality you're paying only $70K. After the deal closes, the seller forgives the $30K, releases the lien and walks away with their $70K and the bank now has a 100% LTV loan. With 14 properties, you're definitely into non-conventional loans. There are banks that will do loans like this, but they're unusual. Most will not.