I tried to find the answer to this elsewhere on the forums, but was unable to find my answer, so here goes:
If a seller is selling individual properties in their rental portfolio, all covered by one blanket loan, can they sell the individual homes on seller finance terms? If so, how does that work?
If not, can they be sold subject 2 while keeping the existing blanket loan in place?
If not, is it possible to buy the entire portfolio subject to the existing blanket loan in place?
Any help is appreciated!
In order to sell one property they will have to speak with their bank about releasing one property from the loan. They will have to show the bank there is enough collateral with the remaining properties to cover the debt. As far as you taking over the blanket loan thats not typically an option. The bank will likely want to write a new loan based on your credit, income, etc. and subject to a new appraisal on the properties.
Thanks for the feedback. Is there typically a cost associated with releasing one property from the loan?
Essentially the seller is looking to defer their taxes by selling individual properties several per year. I'm trying to get the seller to consider some sort of seller finance situation to minimize their taxes, but they obviously still have the blanket loan. Any other suggestions there?
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