Im in the middle of this deal, He said he still has some mortgage, his price is 219k, its a multi family and I only have 5k in capital, but he wants to get rid of it he said, his last statement to me was: just make me an offer and we'll go from there.
it generates 3050 in rent a month.
what should I do, im excited and nervous
I wrote him this;
Thanks, I appreciate that, and I'm definitely interested. Before I put an offer together, I just want to make sure I structure it in a way that works for both of us instead of throwing out numbers that may not make sense. Would you mind sharing a few things with me? Approximately what is the current mortgage balance? What is the monthly payment (including taxes and insurance if you know)? Do you know the interest rate? Once I have that information, I'll put together a proposal for you to consider.
Im in the middle of this deal, He said he still has some mortgage, his price is 219k, its a multi family and I only have 5k in capital, but he wants to get rid of it he said, his last statement to me was: just make me an offer and we'll go from there.
it generates 3050 in rent a month.
what should I do, im excited and nervous
I wrote him this;
Thanks, I appreciate that, and I'm definitely interested. Before I put an offer together, I just want to make sure I structure it in a way that works for both of us instead of throwing out numbers that may not make sense. Would you mind sharing a few things with me? Approximately what is the current mortgage balance? What is the monthly payment (including taxes and insurance if you know)? Do you know the interest rate? Once I have that information, I'll put together a proposal for you to consider.
please help
You’re asking the right questions before jumping in, which is a great sign. Don’t let the excitement make you skip the numbers. With $3,050/month in rent, the next step is understanding the mortgage balance, payment, taxes, insurance, repairs, and actual cash flow before deciding on an offer or creative structure. Seller financing or taking over payments could be worth exploring if the terms make sense, but make sure you have an exit strategy and enough reserves. Deals like this are all about the details, not just the purchase price.
Im in the middle of this deal, He said he still has some mortgage, his price is 219k, its a multi family and I only have 5k in capital, but he wants to get rid of it he said, his last statement to me was: just make me an offer and we'll go from there.
it generates 3050 in rent a month.
what should I do, im excited and nervous
I wrote him this;
Thanks, I appreciate that, and I'm definitely interested. Before I put an offer together, I just want to make sure I structure it in a way that works for both of us instead of throwing out numbers that may not make sense. Would you mind sharing a few things with me? Approximately what is the current mortgage balance? What is the monthly payment (including taxes and insurance if you know)? Do you know the interest rate? Once I have that information, I'll put together a proposal for you to consider.
please help
You’re asking the right questions before jumping in, which is a great sign. Don’t let the excitement make you skip the numbers. With $3,050/month in rent, the next step is understanding the mortgage balance, payment, taxes, insurance, repairs, and actual cash flow before deciding on an offer or creative structure. Seller financing or taking over payments could be worth exploring if the terms make sense, but make sure you have an exit strategy and enough reserves. Deals like this are all about the details, not just the purchase price.
Lender · Denver, CO · Member since 2017 · 159 posts · 70 votes
2mo
You are asking the right questions of the seller, and getting the real mortgage balance, payment, and rate before you write an offer is exactly the right move. Do not skip that step no matter how excited you are to move fast.
On the DSCR refi exit you mentioned, here is what that conversation will actually look like when you get there. DSCR lenders size the loan off the property's own rent against its own future payment, typically wanting that ratio at 1.0 to 1.25 or better depending on the lender and program, so with $3,050 a month in rent you will want your future principal, interest, taxes, insurance, and any association dues to land comfortably under that. You can go <1 on DSCR but you will pay in rate. There is also the knowledge you want to have that lower rate DSCR usually happen with higher prepay penalties, so get educated. I just tried to help an STR investor out, but they turned out to have a 6Y PP, which on >$1.2M loan hurts to sit in for the next 4Y because they got smoked by a loan officer. Some DSCR lenders also want some seasoning, often six to twelve months of ownership or a documented lease, before they will refinance out of a sub-to position, so build that timeline into your plan rather than assuming a quick flip into permanent financing.
Also worth knowing going in: a sub-to deal usually means the existing loan has a due on sale clause, and while lenders calling that clause is uncommon, it does happen, so keep a reserve plan in mind in case that ever comes up. Get the seller's numbers first. Once you have the real payment and rate, the sub-to versus DSCR math gets a lot clearer, and I underwrite DSCR refis for a living, so that seasoning and ratio math is worth double checking before you close. Good luck.
Also worth knowing going in: a sub-to deal usually means the existing loan has a due on sale clause, and while lenders calling that clause is uncommon, it does happen, so keep a reserve plan in mind in case that ever comes up.
Hi there Ray! Thank you for the info. Are there any strategies to try to mitigate the lender calling the due-on-sale? Do you recommend reaching out to the lender to ask permission to take over the mortgage? Are there circumstances that make the lender more likely to call it? For example, taking over a COVID-era loan? Any additional info or tidbits that you have to offer would help a lot! I'm very interested in breaking into investing using creative financing.
Also worth knowing going in: a sub-to deal usually means the existing loan has a due on sale clause, and while lenders calling that clause is uncommon, it does happen, so keep a reserve plan in mind in case that ever comes up.
Hi there Ray! Thank you for the info. Are there any strategies to try to mitigate the lender calling the due-on-sale? Do you recommend reaching out to the lender to ask permission to take over the mortgage? Are there circumstances that make the lender more likely to call it? For example, taking over a COVID-era loan? Any additional info or tidbits that you have to offer would help a lot! I'm very interested in breaking into investing using creative financing.
There aren't. A lender won't come off that position. I can say I have never seen it executed. But the language exists. It is a risk cost/benefit you have to weight. An assumption can be great but with the markets and equity there is a strategic way that needs to go about it. So depends on what You mean by creative financing.
You are asking the right questions of the seller, and getting the real mortgage balance, payment, and rate before you write an offer is exactly the right move. Do not skip that step no matter how excited you are to move fast.
On the DSCR refi exit you mentioned, here is what that conversation will actually look like when you get there. DSCR lenders size the loan off the property's own rent against its own future payment, typically wanting that ratio at 1.0 to 1.25 or better depending on the lender and program, so with $3,050 a month in rent you will want your future principal, interest, taxes, insurance, and any association dues to land comfortably under that. You can go <1 on DSCR but you will pay in rate. There is also the knowledge you want to have that lower rate DSCR usually happen with higher prepay penalties, so get educated. I just tried to help an STR investor out, but they turned out to have a 6Y PP, which on >$1.2M loan hurts to sit in for the next 4Y because they got smoked by a loan officer. Some DSCR lenders also want some seasoning, often six to twelve months of ownership or a documented lease, before they will refinance out of a sub-to position, so build that timeline into your plan rather than assuming a quick flip into permanent financing.
Also worth knowing going in: a sub-to deal usually means the existing loan has a due on sale clause, and while lenders calling that clause is uncommon, it does happen, so keep a reserve plan in mind in case that ever comes up. Get the seller's numbers first. Once you have the real payment and rate, the sub-to versus DSCR math gets a lot clearer, and I underwrite DSCR refis for a living, so that seasoning and ratio math is worth double checking before you close. Good luck.
I love this forum, I am getting so much education, it's so worth it! Thank you, really appreciate you! Hopefully i will be back with numbers!
Im in the middle of this deal, He said he still has some mortgage, his price is 219k, its a multi family and I only have 5k in capital, but he wants to get rid of it he said, his last statement to me was: just make me an offer and we'll go from there.
it generates 3050 in rent a month.
what should I do, im excited and nervous
I wrote him this;
Thanks, I appreciate that, and I'm definitely interested. Before I put an offer together, I just want to make sure I structure it in a way that works for both of us instead of throwing out numbers that may not make sense. Would you mind sharing a few things with me? Approximately what is the current mortgage balance? What is the monthly payment (including taxes and insurance if you know)? Do you know the interest rate? Once I have that information, I'll put together a proposal for you to consider.
please help
If seller is open to Subject-To financing, then ask for a copy of their monthly mortgage statement and the leases.
Find out the PROBLEM causing their motivation to sell and make SURE it's a problem you can solve.
FYI: with only $5k at your disposal, it should be a problem related to TIME, NOT MONEY!!!
Wholesaler · Charleston WV · Member since 2026 · 234 posts · 126 votes
2mo
You’re asking some of the right questions, but don’t make an offer yet just because you’re excited. The $3,050 in rent is gross income, not profit.
You still need the rent roll, leases, payment history, vacancies, taxes, insurance, utilities, maintenance history, property condition, mortgage statement, arrears, liens, and the amount of money the seller wants at closing. You also need to know exactly why he wants to get rid of a property that supposedly produces income.
With only $5,000, you need to be especially careful. Closing costs, repairs, vacancies, and reserves could eat that up quickly. Run the real monthly cash flow after every expense, then decide whether there is actually a deal and which creative structure makes sense.
Do not attempt your first creative deal alone. Have an experienced creative investor help you, and use a real estate attorney or title company that understands the structure. Certain transfers can also trigger a mortgage’s due on sale clause, so the seller needs to understand the risks clearly. Federal law regarding due on sale clauses
Excitement is good, but excitement without complete information is how people get themselves into bad deals.
Investor · Pacific Northwest · Member since 2026 · 65 posts · 16 votes
1mo
$5k against a $219k multi with $3,050 rent is a thin cushion. Excitement is normal, but the structure has to survive missing numbers.
Is the $219k his asking price for the property? That's confusing when you say he's suggesting making an offer to start with.
Before committing to any specific creative path, lock four numbers on paper:
1) Current payoff and exact monthly PITI (not "some mortgage")
2) Real vacancy + repairs off $3,050, not gross rent as free cash
3) How far arrears/taxes/HOA sit behind the note if any
4) What "wants to get rid of it" means for them: monthly relief, a lump, or just out of management
Your message asking those details is a good first move. Don't send a structure until those three land in writing. With only $5k, any path that needs you to fix a hole at close will eat your flexibility.
I think the other investors and replies to this post are wrong about suggesting that you approach this from a numbers perspective. It may work depending on your seller. If that's the game they want to play, but the vast majority of people on this earth are human and have a working nervous system and neurotransmitters (or brain chemicals). The next move is not to pull out your full analysis and send a good offer back. The next move is to simply run through and qualify or unqualify the property based on what he's given you and get him to state the price.
Do this by checking on market comps. Get an idea what similar properties are going for and suggest to him that he's probably looked around at similar properties and noticed a range of prices. Name the price range. Suggest that if you were in his spot you would probably be hoping to achieve a price of [somewhere in high range].
The overshot is intentional. You want to trigger a reaction to lower to realistic territory and get a real idea of what he's thinking.
Primarily, build rapport and listen thoroughly to his story and context clues. Don't start your negotiation based off of your suggested buying price.
Im in the middle of this deal, He said he still has some mortgage, his price is 219k, its a multi family and I only have 5k in capital, but he wants to get rid of it he said, his last statement to me was: just make me an offer and we'll go from there.
it generates 3050 in rent a month.
what should I do, im excited and nervous
I wrote him this;
Thanks, I appreciate that, and I'm definitely interested. Before I put an offer together, I just want to make sure I structure it in a way that works for both of us instead of throwing out numbers that may not make sense. Would you mind sharing a few things with me? Approximately what is the current mortgage balance? What is the monthly payment (including taxes and insurance if you know)? Do you know the interest rate? Once I have that information, I'll put together a proposal for you to consider.
please help
@Kacey Betts I think you're asking the right questions before making an offer. I'd also want to understand the property's operating expenses, lease terms, and condition so you can evaluate the actual cash flow, not just the gross rent. Once you have the mortgage details and the property's numbers, you'll be in a much better position to structure an offer that works for both sides.
