creative financing

[Joseph King]

Good evening BP community, so after creative financing brainstorming I think I have an understanding (feel free to correct me ) of how to use the no money down idea. So using this example (made up numbers) lets say I come across a 4plex for 100k every thing looks good and all units are rented. so I go to my local bank and apply for a commercial loan, 20% down with a 25yr payment period. Now I don't have the down payment (20K) so I talk to the seller who is willing to seller finance as a second mortgage for a 10yr payment period. The lender approves and I close on the deal. Next I rehab and refinance (BRRR I believe) the property is then appraised at 200k. So now I take out an equity loan in which the bank is willing to do 80% ltv (80k). I use the 80k for my next down payment and repeat the process. So if the method is correct my question is simple, Does anyone have any suggestions of good commercial lenders that will work with me on this method?

[Jerry W.]

You have the right idea, but it might be hard to get your lender to lend knowing you are getting the 20% down from the Seller as a second mortgage, especially a big lender.  If you can great.  Sometimes you can get the Seller to finance it the entire property but that can also be tough.  There are first time home buyer programs where you only have to pay 5% down as well.  Once you buy a property, if you bought it right and fixed it and it's value increased a lot you might be able to refinance and use the equity to buy another property.  You have to make sure the property cash flows even with the refinance of more money.