I understand how the Stack Method works -
we have 1st position - typically a DSRC at 70-80% LTV
Then a seller 2nd for approx 20-30% where there must be enough equity
for the seller 2nd to cover the down payment plus some costs.
I have been working with someone who wants to get a stack method working.
He brought me this -
12 Unit Multi-family
Asking: $2,500,00
Where the seller is offering:
- $500,000 down payment (20%)
- $2,000,000 seller financing
- 6% interest-only
- 5-year balloon
- Seller financing in 1st position
I understand there is no 1st position DSCR type loan.
But, in this case if the seller is offering 80% seller financing -
could this work ? It seems, at 1st glance, there might be enough equity
there to cover the down payment plus costs ??
Or, am I missing the boat, and there must absolutely be 1st position
DSCR loan in 1st position for this to work ?