Assuming a mortgage

[Edward Prochilo]

Hi BP,

I could use some advice. I talked to a seller who is upside down in his property and now 2 months behind on mortgage payments (about $1500). He just wants out to save his credit. 

The mortgage company is offering to move the missed payments to the end of the term if he sends them $200. They don't want to foreclose. He can't do that at this point because of the divorce he is going through, he can't afford the property and doesn't want to landlord. 

The property is in great shape: roof is 10 years old in excellent shape, updated electrical, new HVAC etc. It just needs a few cosmetic fixes but is basically rent ready once he clears everything out. It would make a great rental but not with the current payment. The loan can be assumed. 

How do I go about negotiating with the finance company for me to assume the loan and have them refinance it so the payment will make sense to take it on as a rental and provide positive cashflow? Can I just call them or have the seller call them and have them call me? Does there need to be some kind of paperwork in place? Any help is appreciated.  

[Alexander Felice]

@Edward Prochilo I don't know how hard it is to find deals where you are but consider this. You're paying retail for this house. 

The mortgage is 93k and you want to assume this debt. You also said the house is probably only worth 93k or so. You also said this is a deal that barely cash flows AND the interest rate is higher (we are assuming).

In my experience, it's not hard to find a retail deal, they are everywhere specifically because they aren't great deals. To top it all off, this one is going to be more of a hassle than a regular retail purchase. 

So where is the deal? @Darrell Shepherd gave you the best advice I think there is. If there is any deal here it's probably one you set it between the seller and a 3rd party. This isn't a deal you want my friend.