Hey BP,
Looking to poke your brain about a recent deal I came across.
I recently came across a seller looking to work with me on a deal to purchase their house. The house itself is 2 miles west of cherry creek shopping. It is a 4 bed 2 bath home. The owner split the house in half into two separate apartments one upstairs one downstairs. Homes in this area are going north of $500k. Since I am still in graduate school I do not have the money to a) come up with a down payment b) unsure if I would even qualify for loan.
The owner suggested the following options;
1. They would co-sign for an FHA type loan. Minimal down payment, but we use their income, credit score, etc. to establish a good interest rate. The title would be written so I own the home so I am on the hook for mortgage, taxes, insurance, etc. I assume they would take the cash use it for whatever (reinvest into another property).
2. Same as 1., but instead of an FHA, the owners would draw up a separate loan and submit a 20% down payment with their own cash. So I would still be on the hook for the mortgage and then the 20% down payment they had loaned me to purchase their house.
Have you seen a deal done like this before? Am I out of my mind to be trying to purchase such an expensive home with minimal capital?
Original seller finance deals to me were down payment, then monthly payments on amount agreed upon to owner. If you default the owner repossess the house scotch free. I'm trying to view every angle of risk to see if this is a bad deal. Essentially the owners are still attached to my name so they are at risk co-signing anything.
Ideally I want to own a home as fast as I can. I'd like to buy a home in the $250-300k so there is not as much risk involved, but I don't want to pass on this offer and look back in 3 years when the house goes from $550k to $900k.
