Apartment complex purchase

[Scott Gorham]

I found an apartment for sale with an assumable loan. The loans has 35 years left with a really good rate. My question is how do I work out a deal with the owner so that I pay him back over time the equity? I don’t have the cash to give him for the equity he has and assume the loan. What would this be called and how would I structure a deal to propose to him. I have his phone number but wanted to come up with a good proposal before I call him and pitch my idea. Any help would be much appreciated.

[Charles Carillo]

@Scott Gorham

Some of the strategies for buying a property if the original mortgage stays in the seller's name would be subject-to or a wraparound mortgage. If you are assuming the property, you are actually putting the mortgage in your name, and you would need to qualify for the mortgage with the lender. The second part of it is paying the owner their equity. You could see if they were interested in holding a second mortgage on the property for their equity, but you need to check this with the first lender beforehand. Many sellers will not accept this since they are in second position, and it is very risky since if you default (higher probability for investors with no money and/or no skin in the game), they will most likely be wiped out during a foreclosure.