Updated over 2 years ago on . Most recent reply
Need help with creative financing deal
I have a friend who wants to sell his home and buy another home out of state. He is open to selling it to me as an off market deal. He wants $375k for it. Based on my numbers, using traditional mortgage, I will breakeven (income=PITI,expenses, cap ex, etc) if I buy at $285k. I got him down to $330k. I spoke to him more and found out he needs $120k proceeds from the sale of his current house to go towards the purchase of his new home.
I am trying to come up with some creative financing to make a deal. One thought I had was to give him $120k cash and then assume the mortgage on the house. The issue is I’m not sure if I can assume the mortgage if I plan to use the house as an investment property (the house is currently his primary residence).
I welcome any other ideas, thoughts and suggestions!
Most Popular Reply
Ok, so then your best solution is a DSCR loan. Looks like you have the down-payment funds (20%+ plus fees/closing costs). Rent estimates would determine the monthly rent and the debt-service ratio.