I have a motivated seller that has a house of worth $600k and and owes about 300k on it. They're an old couple and they're hoping to sell it for 600k, take their gains and buy a house outright with no mortgage in a cheaper area up north.
Other than paying the 600k, how can I structure this where I can take ownership of their home, but still allow them to take their equity and buy a house?
Hopefully they realize there will be costs even if they get the full $600K for the property. After closing costs (about $48K) and paying off the loan they would have about $250K to buy a new house.
Do you have $250K in cash? If so, you could pay them that and buy the house subject to. Otherwise, you're going to have to get a new loan to pay off the old loan and give them their equity.
If you're looking for a way to give them the cash and not have it come out of your pocket, perhaps they could refi, then you buy it subject to. Realize there is risk associated with a subject to deal. Personally I would not buy a subject to deal unless I was 100% confident I could pay off the loan quickly if the bank called it.
Jon Holdman, Flying Phoenix LLC
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