Possible first rental. Owner financing...fell into my lap

[David Sabine]

Hello BP,

Had this possibly fall in my lap and I'm looking for guidance on next steps. 

Quick background, I'm still very new to REI. I haven't yet purchased any property, I'm still in self education stage. Today I was talking to a colleague about her pending retirement and she mentioned "I have this one rental that I want to unload before retire…" and I said "WAIT!!! Let's talk".

I’m in SCRAMBLE MODE. She said the renter wants to buy but she doesn’t think he could get financing. He is a foreign national and has a good job, great renter but she doesn’t think he could qualify.

So now she has given me some basics and I mentioned we could even do owner financing to avoid realtor’s fees and if I were to default, you’d have even more equity and you could sell the property again. Now where I’m looking for guidance is….NEXT STEPS.

I know first thing, if we do owner financing, I don’t need to loan unless she decides she’s not comfortable. I think we can work this out but she did say, “it is always good of course to know what you’re pre-approved for…” and I do want to go to the bank/credit union to find out (was planning this anyway) but can someone point more towards next steps if I want to try and get her to agree to owner financing.

1. The property has a seasoned renter and is in an AWESOME location (overlooks the ENTIRE CINCINNATI skyline).
2. It's a condo and HOA is $197 p/m
   1. She said MOST of the units are REI rentals. Said HOA does not have a renters restriction.
3. Her current mortgage is apprx $400 (we spoke 5 mins ago and told her we’ll work details out but I want first dibs!!!
4. Mortgage is approx $59K

Questions:.

1. Should I just get pre-approved and do this as a bank loan?
2. How/who holds the note if we can agree to owner financing?
   1. What would next step(s) for this be?

I’m sure I have MANY other questions but wanted to get this out to get a little guidance ASAP. I just feel like this could be GREAT FIRST….BUT….ONLY if the numbers work.

I told her I’d get back to her ASAP with details for what we would need to do for owner financing or other options but we are both working so getting this out ASAP.

Thanks in advance BP!!! WooHOO!!