Creative financing option?

4 Replies

Hello BP, 

I am interested in a local duplex. Seller wants 245k and Ive tried to negotiate seller financing but there is a mortgage on the property. Im trying to avoid the initial 61k down payment traditional lenders want in a multifamily. Does anyone have experience with assuming a loan? and if so, is it a possibility to assume a loan and owner finance the balance of the sale? 

For example, $100,000 balance on mortgage I "assume" (take over) and owner finances 145k on agreeable terms.

Just looking to add more units to my portfolio without a large initial outlay of cash, if I can avoid.   Thanks to all, enjoy the weekend!

@Daniel Kern I have only done a Contract for Deed. Agree to terms dp and loan amount. Seller retains title until terms of CFD are met and then they give a clear title. You can do a subject to the first mortgage,which means you take over his mortgage but don't formally assume, still his credit on the line. You write a second mortgage up to your dp and the seller records. Wrap mortgage where the seller wraps his mortgage into the total mortgage. You pay him and he pays the underlining mortgage.

@Daniel Kern You have to find out if CFD are able to be used in NJ. A wrap would be a little easier since you only have to send 1 payment, but subject 2 you build equity faster. The first has already had payments made so the principle will go up faster each month