Buying via Subject to

[Lawrence Sarpong]

Hi all,

I have a motivated seller that is open to having me assume the mortgage on a 3bd/2bth home for the difference owed. The current mortgage is $168k and the amount owed is $164k, so basically I would assume the mortgage for $4k. The home is currently occupied, however the tenant will be leaving in March 2014. If I assumed the mortgage I have 2 questions.

1. Could I get a HELOC on the property which would allow me to invest in other properties?

2. If yes, how long would I have to wait prior to doing so?

My plan is to sell the property for $170k as soon as the market allows but until then, I would like hold onto the property and use it for the positive cash flow until it sells. Any advice would be awesome. Thank you.

Cheers.

[Brie Schmidt]

• Certain types of government-backed loans are the only ones that are 100 percent assumable. In most cases, you must meet the qualifications of the government agency in order to assume the loan from the mortgagee.
• Conventional loans usually prohibit assumptions; however, a bank may be willing to allow you to assume a mortgage if the current owner is in a financial bind that jeopardizes the payback of the note.

Also - if you plan of selling for 170k you are going to end up losing money in the end. Closing costs and agent fees will eat up that profit