I’m looking to owner occupy an office space. The owner still has a mortgage on the space. The office is medical. I’m trying to find a way to limit my out of pocket funds and minimize how much initial capital I need to put in. I would prefer not to have to put down 20%. Is it possible to assume the loan and refinance in 3-5 years to payoff the seller.
I believe many local commercial lenders will require less than 20% down on an owner occupied commercial building. I'd check with 4-5 of the smallest banks and credit unions in your market and see. In my experience, banks love owner occupied commercial loans. You might be surprised what you could get.
Yes, you most likely can assume the note, but can buy the property without assuming the note; why not just take title "subject to" the mortgage.... which means you're not guaranteeing the note and obligating yourself, but you need to keep the note current if you're going to keep the property. Now, you need to know what the note says and need to know a bit about the note holder..... will he try to call the note? Is there a due on sale clause? If it's a small bank, they might be more friendly. Generally, I don't ask the lender about the note, I just buy it subject too and keep making the payments... never had an issue doing several of these.