Mortgage Assumption and Due Diligence

[Ryan Tessier]

I'm in a situation right now where I have a motivated seller who wants to unload a 3 family in a nice area. It's an FHA Loan with what I estimate to be about $100k in equity after appreciation. I want to assume his loan to my name (something he's willing to do) and pay him directly the profit he would've made on a traditional sale. Turn around, cashout refinance, and recoup pretty much what I just paid the seller to acquire the property. (Seller isn't able to tap into his equity because of poor credit, medical, legal, and credit card debt.)

I'm relatively new to investing (2 years) and this would be my first FSBO deal where no agents are involved. All the numbers and stipulations I just stated are based off of what the seller has told me. But before it comes to putting money I down, what should I be looking for as far as due diligence? What documents can I check to see if the assumed mortgage is in good standing and no missed payments? Can I get a pre approval from a lender for a refinance before I even acquire the property? If I cant refi the property relatively quick to acquiring it the deal wouldn't be worth it for me. What documents should I be looking for? Where should I cover my bases?

Thank you in advance for any help in making this deal a successful one