Assuming a sellers mortgage?

[Ryan Billingsley]

We came in to contact with a lead through our DM campaign that has three properties he wants to move.  He only wants to get what he owes on the properties.  They are all three rented as investment properties.

Property One:

2/1 1k sqft
Mortgage: 64k
Rent is 770 on section 8
Mortgage inc piti: 900 (15 year fixed at 4.5%)

Property Two:

3/2 1052sqft
Mortgage: 57k
Rent: 825
Mortgage inc piti:540 (30 year fixed at 5%)

Property Three:

3/1 864sqft
Mortgage:41k
Rent:700
Mortgage Inc piti:410 (30 year fixed at 5%)

Property one would only make sense if we could refinance it and create a better cash flow situation.

Properties 2 and 3 he wants to do a package deal because they are owned with a partner.  Would it be possible to offer to assume the loan from him to avoid getting a traditional loan?  When doing so is there a due-on-sale clause?

[Account Closed]

Originally posted by @Ryan Billingsley:

@Jon Holdman   Thanks for the quick response.  So we know the seller is motivated.  He would be open for anything I would assume if its gave him a solution.  So the first step would be to mention this to the seller and find out who the lender is to contact them?

If the seller is open to anything ask him how much cash he'll give you to take over his mortgages.  I had a seller once offer me $10K and a 2nd trust deed against his primary residence for the rest. If these properties are producing income, he probably isn't THAT motivated.  

What are the properties worth?

You don't need to contact the lender at this point.  You need to figure out if this is a deal you want.  You can't formally assume these mortgages.  You'd be getting the deeds and taking over payments  The loans remain in the seller's name.  If the numbers work, then you get an authorization to release info so you can confirm the balances and the terms.  Typically, you don't notify the lender that you are taking over payments.