Lease option vs assuming a loan w/ adding some seller financing

[Stuart Nebeker]

Hello, I’ve been asking everyone what best for moving forward on this deal. Here’s the numbers and plan 3/2 1800 sqft with unfinished basement Built 1980 Very desirable area in Vermont 15 acres (subdividable) Comps $300-400 Needs about 45k in repair I’ve got her talked down to 170k I really want to BRRRR this property. She owes 125k on current mortgage Would you -lease option (which she likes) Or -assume her mortgage and have owner carry the rest of the note? This is my first deal But I feel I’m ready after 2 years of studying Thank you for your advice

[Josh Dillingham]

Why would you need seller financing if you can assume the current mortgage? Does she own more than $170k? If so and the agreed upon price was $170k I would make her pay the difference to the mortgage company to bring the mortgage down to $170k before closing. Does her mortgage allow the loan to be assumed? If not you run the risk of the due on sale clause and you'll have to come up the full price of the mortgage quick to save the property. What would your cashflow be after you refinance for the 300-400k it will be worth? I would think you'd have negative cash flow at that point with the higher mortgage.

Why isn't conventional financing an option on this deal? Do you not have or want to put the down payment?