Seller Financing, Taking back a 2nd Mortgage

[Keith Minton]

Hello

This is my first time posting so be gentle haha.

I am looking at buying a Duplex for 85K that will rent out for $1,500 conservatively. The seller is willing to finance 35K of it at 5% for 3 years. I can get a loan on this property for 75% of the Purchase plus repairs and it only needs 5K in repairs. So i could get a loan from a bank on this for 90K X 75% 67.5K which would mean i would only need to bring 22.5K to closing. What i would like to do is get the loan from the bank and then have the seller hold a second for 35K at 5% for 3 yrs. That way i wouldn't have to put any money down but instead i would walk away from the deal with just over 10K after closing costs.

I know this is possible but how can i guarantee that the seller will do the loan after he receives the money from the bank? I don't want to put it in the contract because then the bank won't loan me the whole amount.

I am not worried about the deal numbers, because i am projecting a min of $500 a month in positive cashflow for not putting any money down but instead getting 10K back. I have private money loans out now at 8-10% so this 5% seller loan would be a great deal. I also own 15 rental properties with over 25 total units so i am not worried about fixing it up or renting it out. 

Does anyone have any suggestions about how to structure this deal so i can get both loans. 

Thanks 

Keith Minton

Cleveland, Oh

[Bill Gulley]

Well, welcome to BP!

I'll be gentle .......

Do you like stripes?

Ever hear of bank and mortgage fraud?

Suggest you modify your attitude in business, learn the basics and related laws before you get into trouble. Good luck. :)