Owner financing question

[Wessley Grassi]

Has anyone ever did a deal using owner financing when the owner still had a loan on the property? If so how was deal structured and how was it contracted?

[Tom S.]

@Wessley Grassi  Yes, I have and ideally if your downpayment can pay off the existing loan, that's the best case.  So they owe $30k on their mortgage for example, you put down $30k which will pay their loan off in full.  You could then get title and the seller will have a 1st position lien on the property (the title company or attorney would handle all this).

If you can't pay off their loan, then it's not as clean.  It would be "subject to" or a few other creative ways.  None of which I've done because my attorney wouldn't advise it.  You could have issues like the seller's bank calling the loan due if they find out the title changed hands without their permission.  It's rare put could happen and get messy.

Good luck!