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Updated over 2 years ago on . Most recent reply

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164
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32
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Andrew Merritt
  • Rental Property Investor
  • Summerville, SC
32
Votes |
164
Posts

Seller Financing with Mortgage in Place

Andrew Merritt
  • Rental Property Investor
  • Summerville, SC
Posted

I'm working on securing an off-market quadruplex from someone in my REIA group. He's got a mortgage on it but is interested in seller financing. As I was discussing it with him, I eventually thought about the mechanics of it and I'm not sure if that would be an option? Is it possible to seller finance if they have a mortgage in place?

If not, I was thinking that subject-to might be the best way to go if the lender will allow it.  I can pay him an appropriate down payment for his equity.  Would I be able to have it in the contract that I just pay him something extra per month for X months to make up what he would be getting for seller finance?

Are there any other strategies I've overlooked?  I'm also considering getting a bridge loan to make a cash offer, but that may be less ideal due to all of the closing costs.

Most Popular Reply

User Stats

69
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33
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Logan Graham
  • Rental Property Investor
  • Rochester, NY
33
Votes |
69
Posts
Logan Graham
  • Rental Property Investor
  • Rochester, NY
Replied

If it is a long-term buy a bridge loan may not be the best option unless you are planning on getting the cash to pay it off fast since they are short loans. You will have to find out what his current lender is open to doing if they are still going to keep their mortgage. Depending on how much they have on the loan maybe they would go for the down payment covering what they have left on their loan then they can just pay it off. There are risks though to a wrap-around mortgage because you don't have control of them paying their mortgage every month.  

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