Family Seller financing not free and clear

6 Replies

My fiancé’s family came to me about her aunts house for sale in California that she is trying to sell for $480K. It’s a 3bed 2+ bath with a detached garage that was converted into a studio with a half bath. I recently purchased a triplex and don’t have money for a down payment to even try to acquire her property. I was thinking owner financing would be best and could probably get her to do so since we would be keeping the property in the family. She has 6 years left on her loan and it would be a shame to see a property with that potential to go instead of holding for rental income. She’s tired of renting it and just didn’t have good luck renting it out. I feel like the potential for turning it around is huge but how could I go about it if she does not own it free and clear? She wants to sell to use the money to buy a home for herself out of state. Any suggestions on how you think I can get her to think about the option to sell to my fiancé and I instead?
Originally posted by @Jovan Caballero :
My fiancé’s family came to me about her aunts house for sale in California that she is trying to sell for $480K. It’s a 3bed 2+ bath with a detached garage that was converted into a studio with a half bath. I recently purchased a triplex and don’t have money for a down payment to even try to acquire her property. I was thinking owner financing would be best and could probably get her to do so since we would be keeping the property in the family. She has 6 years left on her loan and it would be a shame to see a property with that potential to go instead of holding for rental income. She’s tired of renting it and just didn’t have good luck renting it out. I feel like the potential for turning it around is huge but how could I go about it if she does not own it free and clear? She wants to sell to use the money to buy a home for herself out of state. Any suggestions on how you think I can get her to think about the option to sell to my fiancé and I instead?

 I know an investor that set up a master lease arrangement with a guy that wanted to sell. She took over the landlord responsibilities while still paying the owner the rent then did a Subject to for several months then refinanced the property to cash the previous owner out. This would allow you to gain control of the property and use the existing equity to cash her out. 

@Tyler Gibson So this master lease would then give me acting as landlord the power to do anything I would like to the property and all expenses would come out of my own pocket? Did the person you are referring to only pay what the owner owed on mortgage or market rent price?

I think you need an equity partner that would put down some of the money and then you can buy them out over time.  If you can't get one of those and the master lease doesn't work then I don't think you have any other options.  Hard Money Loan you need to put in 25% down.