Building and balloon payment due

[Greg W.]

Hi,

A few years ago I purchased a 7 unit building with seller carrying the mortgage with 2% interest for 3 years that ends with a balloon The price was $310,000 and I put down $30,000. I made a mistake of not getting an inspection and took the sellers word on the condition and age of things. Immediately after I took over, tenants complained that there has been roof leaks that the owner attempted to fix himself, without good results. I paid for many repairs but water kept getting in. I eventually ended up replacing the whole roof.

At the end of last year, I talked to him about extending our agreement because I spent a lot more money than expected and had credit things to get in order. We verbally agreed on 18 months if I pay an extra $5,000 towards balance when original agreement expires. I sent him a written agreement, which I got my notarized signature and emailed over to him. It's been months and he hasn't gotten it back to me signed. I emailed him about this and he says he agrees to it but we have a few months before we need to sign. I didn't want to wait until last minute and don't feel good about this.

My question is, what are my options to get out of this situation the best I can? I know I can go refinance but do have the credit challenge. an I request the contract be voided for not disclosing the roof situation? What would you do?

Thank you

[Damon Pendleton]

Obviously consult an attorney in your state if you really want to know the legal consequences but from the sounds of it you have one option- rifi. If you haven’t given him the $5000 you don’t have an agreement for an extension anyway.

You chose not to do an inspection. You’ve had 3 years to get financing in place knowing the balloon was coming. Any attorney worth their salt would cost you more than the cost to refi if you chose to litigate this roof issue and I doubt you have a slam dunk case. So lesson learned- now rifi, move on, and next time get an inspection and/or add language in your contract that addresses this type of potential issue.

I promise that most of us have learned a lesson (or two) the hard way so I’m not judging you on that.