Investor liquidating rentail properies...

[Grant Cherrington]

I have an investor who is liquidating several properties and based on the preliminary information I've received it seems he's asking retail for the properties. If I determine that he owns the properties free and clear I was considering the following strategy: He takes out a loan (probably 80% LTV) and I would take the property over "subject to" and pay his loan payment. He would carry a second for 60 months at 0% and no payment. I would have a balloon payment for the balance in 5 years. He would ultimately get retail and would not incur capital gains since it is a loan (at least that's my thinking). I could then market the property as lease option with a down payment of 10%, finance at 9% amortized for 30 years with a balloon payment in 3 years. I would appreciate any constructive feedback on this concept. Thank you.