How to do seller financing with a loan on it

[John McKee]

Question for the group. I have 1 million dollar property with about 500K left on the loan.  How can I sell it with seller financing if the bank already has a note on the property.  I can't afford to pay off the 500K myself and either can the tenant for a downpayment.  Any solutions on how to structure a deal like this?

[Gino Barbaro]

@John McKee

You would need to get permission from the bank originating the new loan. You would be in the second position. It's technically not seller financing, which means you have 100% equity. It would be considered a seller carry back.

The buyer would have to come in with some down payment money, you create a note, and the buyer would have to secure bank financing.

My good friend Bill Ham wrote a book called Creative Cache. Talks about seller financing and master lease options.

Gino

[Chris Seveney]

@John McKee

Some states allow a contract for deed to be done with and existing mortgage (and some do not), that is the most common way I see this occurring. That’s probably best way as a lender to keep title in your name but in many states you still may need to foreclose on the cfd -

What state is this in (please don’t say DC)

[John McKee]

This is a commercial property in Virginia