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Updated almost 2 years ago on . Most recent reply

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L. Brown
31
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67
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Need help with creative financing deal

L. Brown
Posted

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

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1,569
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Simmy Ahluwalia
  • Lender
  • Atlanta, GA
184
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1,569
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Simmy Ahluwalia
  • Lender
  • Atlanta, GA
Replied

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.

  • Simmy Ahluwalia
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