I would like to purchase a property from my friend who has a mortgage on the property and would like to sell me the home for no money down. We would like to set a kind of promissory note situation wherein I take possession of the property with rights to refinance or resale once renovations are complete. I would pay 5% interest above the agreed-upon price and the note would have a duration of one year.
Can anyone direct me to a template for a contract we might use to get to closing?
Is there any other kind of financing available for real estate purchases that do not involve a typical mortgage with all its debt-to-income requirements? Every hard money lender I've talked with basically wants all the same criteria of a bank (or more) but with higher fees. I've looked around as best I can and can find no other forms of alternative lending for a deal like this, wherein a buyer has a home under agreement that - by all accounts - is worth 170% more than the asking price!
I would like to purchase a property from my friend who has a mortgage on the property and would like to sell me the home for no money down. We would like to set a kind of promissory note situation wherein I take possession of the property with rights to refinance or resale once renovations are complete. I would pay 5% interest above the agreed-upon price and the note would have a duration of one year.
Can anyone direct me to a template for a contract we might use to get to closing?
You'll want to seek an attorney to draft a contract for you, worth the couple of hundred bucks!
Also in terms of refinancing, you'll want to make sure you have a lender lined up. Just because you have a great deal, doesn't mean you'll be able to get financing.
Thank you for your replies. Can either of you gentlemen - or anyone else here - advise if it would be possible to structure this purchase as a business loan? I mean, understanding I may not be able to qualify for a mortgage at this amount irrespective of renovations I would still like to make said renovations and (if nothing else) resell it immediately for potentially a six-figure profit.
Are there any lending instruments or banks that would finance a deal like this if I were stipulating it as a business deal, possibly forming an LLC?