Structuring owner finance contract on a 4-plex
Hey BP! I need help structuring this deal and the owner contract. There are some items I don't know how to approach.
The seller's situation: She is an elderly woman who's daughter is helping sell. Daughter is POA. Seller willing to carry a contract for 1 yr with a $25k down payment. Mom and daughter are currently on title and there is a reverse mortgage as an only lien against the property. Seller is proposing doing a quit claim dead to remove daughter but elderly seller remains on title with a 10% holding-Seller worried being off the title will trigger due on sale with reverse mortgage company. At end of 1 yr term, I refi out of property and remove seller from title. Seller would carry interest only contract.
My situation: Completing a flip so capital tied up for next 60 days or so. I can meet the 25k down no problem but a 20% down payment for conventional financing is around 70k which I'll have shortly. Comps today support the purchase price and purchase price is about 90% of market. I plan on refinancing in 6 mo after seasoning.
I see the risk of seller on title still..is there anything else I am missing? What are my options or alternatives?