Buying a triplex from in-laws creatively

[Jeffrey Smith]

I currently have a home of my own with some equity I'm sure of but I am looking to buy this triplex from my 2 aunt's & 1 Uncle in-laws...They're motivated being that there parents died and now they just want to split up the funds... They owe about $150,000 but the house is worth about $800,000 give or take...I've been dealing with fund & grow for starting a business but now this opportunity just came about and this was my thinking...1) try to get enough money from fund & grow credit cards to pay off the remaining balance on there mortgage this becoming like my 20% down so to speak...2)have them sign a Promissory note or something🤷‍♂️ giving me ownership until I refinance...3) refinance in hopes to have enough equity to now roll in the 20% down AND pay them all off if they sell it to me for say $550,000+the $150,000 I already would have gave =$700,000... $7500 is what all units together would rent for fyi... I don’t know if I’m off my rocker but this is the angle I’m thinking in order to get this property if anyone can set me straight or in a better path please my time is limited...*note* I also figured if I turned it into a Llc I could take a vantage of bonus appreciation and get that $150k back

[Edward B.]

@Jeffrey Smith, there is definitely a deal here if you can get an $800k property for $700k, but I think you are overcomplicating it. If it will appraise for $800k then you will have to come up with $160k-$240k down payment to finance it. I had to look up fund and grow and didn't look too far into it but I am skeptical of operations like that.

I would see if they will sell the property to you Subject To first. Sell them on the idea of steady income every month and then a big payoff when you sell/refinance the property. In that scenario they would sign the deed over to you or your LLC in exchange for a Promissory Note and Mortgage/Deed of Trust that YOU sign promising to pay them $550k based on the rate and terms you all agree to in the Promissory Note. Then you take over the payments of their current mortgage and the headaches of the termites, toilets, and tenants and they just get a nice fat check every month. Ask them what they intend to do with the money if they sell it and if they don't have plans for it then you can sell them on the idea that this is better than parking it in a CD or Money Market account. Lot's of ways to structure this type of deal. You can even put a balloon on the Note so they know when they will get their payoff. In your strategy, you are essentially asking them to do this anyway only with you paying off the current mortgage somehow.

If they want the money now it would be a little more challenging, but still doable. This all assumes that your numbers are correct and that they are willing to let it go for $100k+ less than market. Let them know that selling can be a hassle filled with uncertainties and it will likely cost them at least 8%-10% in closing and transaction costs to list a property with a broker.