Need help with first RE deal

2 Replies

My wife and I have been approached by her parents about purchasing the house that she grew up in and that we live in currently. The property itself has an older two family building on the lot and then a newer duplex attached by a breezeway (the city would not let them split the lot into two separate properties and any new structure had to be built attached to the old building). Three of the units are rented to tenants, one unit is where my wife's sister lives, and my wife and I live in an unrecognized basement unit which is technically unrentable because it does not have a second egress point. My wife's parents ultimately want to split all of the units into condos so that they can keep one for my wife's sister and sell us the older building with a chance to buy the third unit in the future. His one sticking point is always having one unit for my wife's sister to live in. Is there a way to avoid splitting the property into condos while putting in the sale agreement that the sister will always be able to live in her one unit? Also her parents are interested in owner financing the deal, but they still owe $170,000. Would we be able to take out a loan to pay off what they owe, and then they finance the remaining balance. Can anyone provide any insight to how we could structure the financing through her parents/the owners? Any help would be greatly appreciated. Dave

@David Bellmont - I am not sure about the process for subdividing the lot, or breaking the units into condos, so I won't comment there.

But as far as financing, it sounds like traditional financing it out the window. But you could look at private lending, hard money, or commercial financing. Then structure the deal so you get a first mortgage to cover the $170k and have the parents do a seller financed second mortgage. Now a lot of this will depend on the property value, your credit, your reserves and the lender. But, it seems doable. 

Yes they could make the sister's unit a condition of the sale.  You could have an option for the sister to lease at $1 a month/ year for how ever many years you want, it would be a separate agreement that you could write up privately or with a lawyer, but my understanding is that it could be done.  Speak with a lawyer to be sure.

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