Seller Financing at 30%? How to finance the other 70%?

[Jeff Cody]

Hey BP! I've got a great opportunity in Florida to buy multiple properties from an older investor looking to get rid of 5 SFR's. He's open to financing and we agreed he would carry 30% and I'd finance the other 70% through a bank or other lender.

I'm starting to get advice from lenders now though, that I'll still need to come up with my 20%.  I see my 'skin in the game' as the money I'm putting into the rehabs, but I don't think that will do...  (5 homes will total $1.8M, so my 20% would be $360k, and while doable I'd rather keep that capital for rehab, reserves, and other properties vs down payment)

How have some of you financed the other 70% in a deal like this?   

Thanks!  - Jeff

[Will Barnard]

I would speak with multiple lenders to see what each has to offer. Some will allow their first position to have a second loan behind it regardless if it is seller financed or not. Not all lenders are created equal so look for the best options. Keeping some reserves is certainly a wise thing to do and likely a necessity with most lenders wanting to see reserves of 6 months min. Once you add value with rehabs, you could also cash out refi (once any seasoning requirements are met) to get some additional tax free capital back into your account.