Answers · Owner Financing & Alternatives
Can I combine seller financing with a land loan?
Yes — a seller carryback behind an institutional first is a classic land structure. The lender funds up to its LTV limit in first position; the seller carries a second for part of the gap; your cash covers the rest. It shrinks the down payment without surrendering the deed.
A worked example: $1,000,000 of ground. A 70% first puts $700,000 to work; the seller carries $150,000 in second position; you bring $150,000 instead of $300,000. The seller gets most of their cash now plus interest on the balance — an easy yes for a motivated seller in a slow market.
Lenders have rules about this, so raise it early. Most asset-based lenders (Turnrow included) allow seller seconds when the combined LTV stays sane and the borrower still has genuine cash in the deal; some banks flatly prohibit them. The second must be disclosed and recorded — a hidden side agreement with the seller is loan fraud, not creativity.
Negotiate the second like the junior debt it is: longer term than the first, no balloon before the first's maturity, and interest-only if cash flow is tight. The seller's second should never be able to force a sale out from under a performing first.
The Turnrow angle
We see seller seconds weekly and underwrite them cleanly: disclosed, recorded, combined LTV within reason. It's often the difference that makes a tight purchase work.
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