I'm working on a case study for a RE Investment Firm and have a couple questions about the financing terms provided:
Vendor Take-Back Mortgage
The 3 year term seems very low, especially considered against the 10-year hold I've been asked to model. I'm not entirely familiar with vendor take-back mortgages, but I assume the financing payments would be amortized the same as if the term were 25-30 years, leading to a large outflow of cash in the middle of the analysis.
Based on what I've read about this type of mortgage it's usually in addition to traditional financing, and is used to reduce the minimum down payment. The case doesn't mention any other form of financing but would you guys assume another source to increase the LTV?