Securing better debt service terms with bad credit.

[Edward C.]

I have in investor friend who over the past year has purchased and rehabbed 3, 2 unit properties and now has them fully rented. He was able to secure the properties for less than 50% ACV and has done all the repairs himself. Hence he has done a very good job.

He’s using hard money lenders for these projects on a one year balloon that is coming due. Also do to the over leverage he has run his credit to the lower 500’s with the rehabs. The investments are good and he’s pulling in over 40K Net after debt service insurance and taxes.

He has lost his job so this is his only income.

After discussion we thought that perhaps there is a way that he could sign over 2 of the properties to my LLC so that I can secure a good credit and then do an owner finance back to him. Would this be Legitamit?

I’ve never done an owner finance before so am looking for advice if this is the best option as well as any other brain storming ideas. I'm trying to help him out to keep him afloat, he is very good at finding and securing properties and he would be getting more if he didn't hit the leverage ceiling.

Location is Fairfield County, CT.

I thank you in advance for any advice on this.