Multifamily Commercial Loan Assumption
Hello All,
I am currently planning a move to Chattanooga, TN, from South Korea. I am doing some "window shopping" on apartment complexes there. Below is a link to a listing for a 42 unit apartment complex with an option to assume the mortgage. It's currently listed for $3.1M and has a $1.68M remaining balance. If I were to purchase this complex for the asking price and assumed the $1.68M balance, would I have to pull out another loan($645,000) to meet a 75% LTV required by lenders? Or is the loan assumed by me without a down payment? I hope I expressed this clearly. I am simply educating myself on real estate as much as I can and couldn't quite find the right answer to my "what if". Thank you for your help.
Most Popular Reply
Hi Cody! So there are several questions you would want to ask the seller. First, if they are selling for 3.1 and they have 1.68 remaining, it sounds like to me you will need to come up with another 1.42. So if you were coming in with that remainder in cash, I don't think you would have a problem with any LTV issues with the lender. However, if you would need to take out a second mortgage on a portion of it, what you would need to find out from the lender is how they would work with a co-op mortgage broker. You may also want to find out from the seller if they have a "subject to" option available. I am sure some other folks on here can also offer some great and/or better advice, but that is just my take on it. :)