Seller financing Down Payment of 20 Unit Apartment Building

[Victor Peng]

I came across a 20 unit apt in Houston, TX. The owner has a mortgage on it that is not assumable.

Is there a way to purchase the LLC that holds the building/mortgage or will that still trigger a due on sale clause? Or would I need to request to loan docs to confirm this?

The property is ~75% occupied, so it wouldn't qualify for agency programs.

The seller is extremely motivated and may even consider seller financing her equity. Are there any lending programs that allow for seller financing of the down payment in 2nd position? 

This would be my first real apartment building, I only own a 4 unit. If I had to come up with the down payment, closing costs, etc. it would be tight, and I worry that I wouldn't have enough working capital.

Thank you for your help!

[Joshua Christensen]

@Victor Peng

We do a lot of seller finance deals in Albuquerque. Our attorney explained the "DOS clause" as a tool lenders can, at their option, exercise in the event a transfer has occurred. Because these lenders are so big and their payments are machine processed, they typically only see that a transfer took place after the loan shows up on a default report. They don't police these.

Now, that being said, consult with an attorney in the state you're looking.  @Gino Barbaro hit it on the head, get creative.  Master Lease it and work into a purchase for financing.  Lock in your purchase price at your agreed sales price today and then finance it in 3-5 years down the road.  

There are more than one way to skin it.  

WArning: You are asking legal questions in a forum online. It's a recipe for disaster. Spend the money and talk to a real estate & business attorney who can advise you on transfer vs. keeping the LLC, and keep you out of trouble.