Trying to figure out best options

[Fred Moadab]

My wife and I have been living in our current house for the past 23 years which is fully paid for. We bought it in 93 for $300K with the taxes of $8K and now the taxes are almost $20K and the house is worth about $1M, but we are both 75 + and can't afford these taxes anymore. I also have a 3 family house I rent out which is also fully paid for and has a positive cash flow of $5500 per month. We have decided to downsize to a more affordable house, but I no longer have cash to buy another house without selling the current one, and my income has dropped significantly which makes it difficult to obtain a mortgage for a new house. I need advice of what my options are if any, preferably not having to deal with banks. I wonder if there is any way to sell my house and buy another without obtaining a mortgage, simultaneously and just move to the new house. Any advice is much appreciated before hand. Thank you,

[John Ford]

Hi Fred. A bridge loan is a pretty common loan that investors and companies use to cover short-term (under a year) cash needs. One of the good things about using a private money lender is that they have far fewer requirements about income and credit history. They're more real-estate savvy than traditional banks and will base the deal more on the securing asset (your current house in this case) than your personal finances.

Given your situation –having two free-and clear houses and buying a property cheaper than your current home– I'd bet most private lenders would be more than willing to make that loan. For them, it's pretty low-risk as far as bridge loans go. The only major risk is that your current house doesn't sell for enough to pay off the loan.

Most likely, they will put a lien on your current house so that you can't sell it without them getting paid off. The interest rate will be a lot higher than a traditional bank mortgage. But any payments, if any, will be interest-only. But you might be able to get a lender to postpone even interest payments until the end of the loan. Lookup private lenders in your area or make another post "Looking for private lenders in New Jersey" and give some a call to see what they can do for you.