Assuming FHA loan

[Mark Cermanski]

Hello everybody,

I'm a newbie investor trying to use creative financing for my next deal. My wife and I bought and lived in a condo before moving out and renting it out. We now live in a townhome where we wish to do the same thing. For our next property we wanted to house hack a multi-family. There aren't many 2-4 units that come up in our area and when they do they go quick. There is however one triplex that's been listed for 150 days now that still hasn't sold; due to the lack of profitability on it from higher interest rates. It was over my price point but today I eventually got interested and called the selling agent.

The previous owner used a FHA loan to house hack into it. Unfortunately he passed away just a few months into owning it. His family lives a few hours away and just want to sell it, they have no interest in being landlords. They've dropped the price from 550K all the way to 499K but still have had no luck finding buyers. The returns on buying it with 25% down produce on dismal cash on cash return. Even attempting to house hack into it with todays rates don't seem worth it.

This is where instead of giving up I decided to try and get creative. I used PropStream to gather the mortgage information. 30 year fixed FHA with a 3% rate for a paymentI of $1900. The other two units would rent out for $1500 each. Obviously if I could assume this mortgage using subject-to and move into one unit this would be a slam dunk deal. There is a balance of $430,000 on the loan and I estimate that it'll need some very minor cosmetic repairs.

Now finally for my question. How would you go about making an offer on this? In my mind I feel I could get it without giving up any down money. Id be saving them $1900 a month they're paying as the place is currently vacant. They seem to be motivated sellers. Does anyone have any experience doing something similar to this? How will the selling agent get paid for being part of this process? What are some things I should be aware of?

Any feedback would be greatly appreciated. I want to continue to build my portfolio even in this difficult market so Im hopeful I can make this deal work.