Pay off existing loan to close on property for seller financing

[Luke Edwards]

Hi,

Sourcing my creative finance people for some advice here for a begginer real estate investor. I would like to go forward with the seller financing route if I am able to get this property under contract for favorable terms for me. The house appears to have an existing loan on it. Does that have to be paid off at closing? How have you all delt with situations where you seller finance a property with an existing loan on it?

The seller is open to seller financing but I am trying to figure out how I can structure the financing and if that loan will need to be paid off at closing for the title to transfer.

Deal Details: 

Est. Left on Loan: $175K (Maturity 2/14/52: 3.55% Interest Rate) with monthly payments $835

ARV: $275k

List Price: $271K

Rehab Needed: $15k

Let me know if you need any other details.