Loan Assumption as a form of no money down?
I'm new here, have zero deals... well I kinda have had two but not under the aspect of wanting to do this for income. I got divorced in 2014 gave my ex the house but if she sold it I got half the profit, if she kept it she had to re-fi it into her name. She couldn't re-fi so she decided to sell it, her realtor told her a few things that needed fixed and she couldn't afford to fix them. I on the other hand could and with my name still the only name on the loan for the house I told her she could move I would give her $1,500 and I would retake the property. The note had $108,800 left plus the $1,500 to her and I spent $2,800 on repairs on the house. The house is 10 minutes from Wright Patterson AFB, Dayton Ohio and is a 4 bed, 2 bath ranch, full basement, new roof, new Central heat and A/C, Detached 2.5 car garage, fenced back yard on .38acres. Appraisal on the property was about $135,000. I put it on the market for $140,000 finished price as I worked on doing the paint and repair work. I had someone bug me for two weeks to come look at it as is and I let him look at it. He made me an offer to stop working on it and buy it as is for $128,000. After some negotiating I offered him to Assume my VA loan of $108,800 @ 3.75% and cash out at closing to me for $22,000 this would give me the profits I wanted, and him the total price he wanted, at his $128,000 offer he would have had $7-8,000 in closing costs. He took the deal and we both benefited.
Now for my question, does anyone do this with Banks? I know it's an option to chase pre-foreclosers with owners failing to make ends meet. I feel like a bank who is about to Auction off a property for a lost of money would like the idea of maybe having someone assume the previous owners loan and rate. The person assuming the loan would only have about $800 worth of inspection and Title work for the transfer. No money down and no closing costs. Is anyone doing anything like this? It could then turn into a BRRR or flip. I feel like this would be a good way for someone to start with, I make great money, but I have been paying student loans off and not saving cash. Thoughts?