Creative Strategies for Obtaining SFH From a Family Member
Hi BP community,
I may have an opportunity to acquire the SFH I grew up in from my father and I am looking for some feed back on creative strategies on how I might go about it. Seller financing doesn't work bc the loan isn't fully paid off. Also, I am not looking to take out a traditional type of loan as I recently have done so, I don't want to use any cash and the numbers wouldn't make sense going this route anyway. I've started looking into learning about "subject to" strategies however, my father isn't hard pressed to get rid of the property at a low price. Part of me thinks it's just not a good deal, yet I believe that there's got to be something creative out there that can make it work. Thanks in advance for any feedback!
#1 All Forums Contributor
- Investor
- Virginia
@Zackary Ottman
You could do subject to with a second loan which is seller financed.
Other than that not many other options as you both want very different things that are not compatible
Zachary,
You can do a "Gift of Equity" purchase which is actually similar to a refinance. Since your family owns the house they can gift you both the "equity" and the "closing costs" which comes form the exisiting appraised value. This way you do not have to come out of pocket any funds and you can also take out a HELOC or cash out to pay them some funds if they need money beyound the payoff.
@Chris Seveney Chris, that sounds good I’m just a little lost on how the seller financing would work being that the house isn’t fully paid off. Care to elaborate a little more?
@Jason Wray That sounds like a good deal. I’ll have to talk that over and look into it some more.
#1 All Forums Contributor
- Investor
- Virginia
Quote from @Zackary Ottman:
@Chris Seveney Chris, that sounds good I’m just a little lost on how the seller financing would work being that the house isn’t fully paid off. Care to elaborate a little more?
You would take over payments on the current loan, and then your father could give you a loan on the property for the balance and his loan would be in 2nd position. Then when you refinance you can pay both off.
@Chris Seveney Nice, I’ll look into that option. Thank you!