Creative Finance into Bank Refinance
Hey everyone,
I thought of this hypothetical scenario where I would do a seller-financed deal on a property valued at $250,000. I plan to put down $100,000, leaving a seller-held mortgage of $150,000 at an 8% interest rate with a 3-5 year balloon payment.
The plan is to:
- Make regular payments on the seller-held mortgage for the agreed-upon term.
- Pay off the balloon payment at the end of the term.
- Immediately refinance the property with a traditional bank mortgage to pull out a significant portion of equity.
Does this strategy sound feasible? Are there any potential pitfalls or risks I should be aware of? I'm concerned about potential issues with refinancing, such as property valuation, interest rates, and lender requirements. Any insights or advice would be greatly appreciated!
Thanks, Elliot