Updated almost 10 years ago on . Most recent reply
Prospective property
I'm looking to get a second, third, etc set of eyes on this deal. I do not have any numbers on terms because I've done all that math and that cash flow works. This will be the third loan in my wife's name. Does anyone see any potential issues with this deal?
Purchase price: $105,000
down payment to bank: $21,000
Seller 2nd mortgage: $20,000
$105,000
- $21,000
= $84,000
-$20,000
= $64,000
Total Bank financing $64,000
Seller 2nd mortgage is moved to a different house.* Now total debt on home is $64,000
After 6 months of seasoning Erin does a Cash Out Refi.
Assuming the home is still worth $110,000. 20%LTV is $88,000
$88,000
-$64,000
=$24,000 Cash out
* This property will be purchased by my wife, the mortgage will be moved to a property in my name only.
Most Popular Reply
I'm not sure what you mean by "Seller 2nd Mortgage is 'moved' to a different house" - even if the lender allows this, it doesn't create any wealth, as your post seems to infer, and would hurt cash flow elsewhere. It doesn't improve this deal.
-Christopher