Seller Financing in Louisville KY

[Vincent McClendon]

Hey BP, 

I am in the early planning stages of getting involved in Multi-Family deals in Louisville KY. Was wondering if anyone has experience getting seller financing to partially finance deals in this space. Hoping to use a combo of commercial loan and seller financing to borrow up to 90-95% LTV. No deals in the works at present but working on getting pre-approved by a local commercial lender (Republic Bank). Are folks seeing deals structured this way in this market? Looking to get involved in class C properties via value add strategy and properties in the in $500-$750k price level (assuming the cash yield / cap rates makes sense).

Thanks,

Vince
 

[Raphael Collazo]

Hey @Vincent McClendon!

From my interactions with Republic Bank, they tend to be pretty strict on their investment criteria. Have you tried any other banks in the area? River city bank and L&N Credit Union are one's many investors in town use and they tend to be relatively investor friendly. Although I can't promise they'd be willing to fund the deal you're proposing, may be worth reaching out to ask. Second, do you plan on syndicating the deal? If so, you could ask your partners if they'd be willing to personally guarantee the bank loan as well. Although this is not an optimal scenario, it may be the only way a bank would be willing to put their money at risk. Also, have you looked at using private and/or hard money? Although it's often more expensive (7-15%), these individuals tend to be less strict on the down payment requirement than banks and will look more at the investment as a whole. Along with that, they may even be willing to fund some or all the repair costs of the property. You could then refinance the property using a conventional loan and pay back the private/hard money lenders. If you attend the K.R.I.E.A meeting tonight, there are a few private and hard money lenders that regularly attend. Sure-point Equity and Flippin Loan just to name a few. May be worth attending to meet them and ask about their criteria. Hope this helps and good luck!

All the best,