Condo association limits rental option. Now what?

Question

I am looking for creative finance options that will help get a seller out from under a condo with a FMV below what he paid. This is not a potential short sale, (and the seller won't accept that as an option) but in a market with flat appreciation the closing costs and realtor fees will bring him below what he paid about a year ago. The property would be a great rental but the association is at their 49% rental cap.

Is there an option that involves terms, or something similar (much like a lease option) that would allow a buyer to pay more over time while still transferring ownership now?

Rick Pozos · Answer

The seller probably needs to sell WITHOUT the help of a realtor (sorry!!). Or lower your fees and the buyer agent fees.

Selling after one year is usually money coming out of the seller's pocket. Closing costs and realtor fees usually end up costing about 10% of the price of the property. If the property did not go up 10% in the last year, he is stuck. Wait a year or two. OR as mentioned already, he can wrap the loan to break even.

Someone is going to have to take the hit, bank, realtors, seller, buyer. Not everyone can make money or at least not as much as they normally do.

Wayne Brooks · Answer

The seller would be financing the sale.....by means of a wrap mtg, leaving his existing mtg in place....technically a form of sub2 which has risks of the underlying loan being called due, a risk to both parties.