Updated 6 months ago on . Most recent reply
Assume a Loan - Negative Cashflow?
I might be crazy but…..would you?
Scenario:
Have a chance to assume a loan that has 28 years remaining, 5% interest, and in a very quickly growing suburb of Raleigh NC.
The townhouse would lose approximately $300/mo. Total payment is $2150/mo and market rent is $1850-$1900/mo.
Loan assumption Is essentially at market value $298k, but the $0 down outside of closing cost on loan assumption are what’s hooking me. I can put 25% down and get a $300k Townhome to cashflow near 0.
Also, the family is looking to buy a SFH and would be using my wife (realtor) to buy. Therefore, we would make about $8000-$12000 in commissions from the purchase.
Am I crazy to be considering this?
Most Popular Reply
What if home prices drop? That does happen - then you have negative equity and negative cash flow.
- Chris Seveney
