Seller Financing without a clear title

7 Replies

I am making an offer on a four-plex in a nice area. The offer is for $300,000 with a 4-5% interest rate yet to be finalized. The seller still owes $93,000 on the property. I am willing to make a down payment of $40,000. How do we structure the note or notes with this mortgage balance issue?

Maybe I am missing something here, but as far as I know in this situation. You would just need to work out your mortgage and interest payments with him then while you pay the $300k he will pay off the note. 

However, you really should get an attorney to do this for you brotha. Legal advice over the internet on a $300k deal sounds like a bad idea if you ask me. 

@Ryan Talmadge

I agree, an attorney should be consulted before moving forward with this one.

There may be a creative solution here, but you’ll need to navigate a lot of potential pitfalls along the way.

Where is the property located?

Thank you, gentlemen. I am definitely going to get a lawyer involved, but I was hoping to provide the seller with some information that will make the deal more understandable, by showing her a way this might be done. The property is in south Texas.

So it looks like you would be doing a  hybrid subject-to transaction. Essentially taking over the mortgage payments while structuring amortized payments for the rest of the equity. 

It is somewhat of a grey area (depending on who you ask) but there are a lot of people who do these types of transactions. They are a bit more complicated and you will need to make sure your title company is okay with doing it. And like everyone else has mentioned, definitely speak to your RE attorney and have them draw up the right paper work. 

I am by no means an expert on Subject-to's but I have a little bit of practical experience and I could also try to get you in contact with someone who could help. Shoot me a message if you got some more questions.

P.s. I also have a title company you could use for the subject to if yours isnt comfortable with it

-BA

Thank you, gentlemen. I am definitely going to get a lawyer involved, but I was hoping to provide the seller with some information that will make the deal more understandable, by showing her a way this might be done. The property is in south Texas.