All Forum Posts by: Jose Jimenez

Is the easiest way to protect a cosigner in case of your death a life insurance policy? Has anyone done this in the past? 

My sister is likely going to be co signing a 30y loan cash out refi for me and in the event I have some sort of accident and am no longer around, I don't want her on the hook for a mortgage on a property in which she is not on the deed. Any suggestions or pointing me in the proper direction would be greatly appreciated. 

@Ceasar Rosas

Thanks for taking the time to provide your perspective. I could outright buy the property with the conventional means, but I rather save those for another scenario. Meaning I don't want to max out on those if I can use this means to acquire the property. I was planning on offering him a rate similar to current lending rates. I also feel there is more of the pie to go around if I stucture it the way I am thinking. More cash flow for him, more equity for me. I also don't see him doing a 1031. I am a rent and hold guy and I would not anticipate paying this down especially at the rate I am planning to offer. My understanding is that from a taxation perspective an outright purchase would give him a pretty big hit on his tax bill while the monthly payments would be spread out keeping him in a lower bracket. The funds also stay in the family vs. an external lender and that makes me feel warm and fuzzy :-)

Thanks for the suggestion on gifting to get the deal done. It's been a while since I've read about that but I did use a gift to help me close on my first house. 

Agreed. I am looking for an attorney currently. Unfortunately the last 2 I have worked with were not very good. 

You say the seller financed deals are not common here, do you know why that would be the case? Is it a regulatory thing (SAFE Act or other NY law) or just a product of the historic low rates?

Thanks again for your help

@Jeff Filali

Thank you for taking the time to reply. I will try to reprogram myself in that way but I have to acknowledge it will be a difficult task for me. You're right and it's solid advice. 

I have looked at the numbers and think they make sense. I have a very similar multifamily home and know what my operating costs should look like. I've made some adjustments (up and down) and know my first year will incur additional expenses (vacancy, making apartments rent ready, etc.). I am just double checking some of my closing costs. 

When you say you "wouldn't do the deal" unless you could finance it another way, what specifically do you mean? Are you talking about risk mitigation in that I should be financially strong enough to finance it through other means? 

I agree that business with family can be tricky, I've had positive outcomes, and not so positive outcomes. Thanks again for your input.

Hi BP Community,

I am trying to figure out how to put together a proposal for a seller financed deal. I am the buyer and my uncle is the seller. I, as the buyer would be proposing the deal to him. I would like to draft something to give him, showing him the numbers. Yes I can just give him an amortization schedule but I wanted to hear about how others have structured their deals. I am new to this so please bear with me. If any of you could point me to resources on how a deal like this could be structured (balloon payments, terms, etc.), I'd greatly appreciate it. I have read some forum posts on the topic and read the chapter on seller financing in the BP book investing with no or low money down. I have an idea what I would offer but sometimes it's what you don't know that changes how you look at a problem and tackle it. I think I would gain value by seeing actual examples and interacting with the community on this.

Background:

1. Property is located in bronx county, owned free and clear. No back taxes. 2 units.

2. Because I know some of the particulars my uncle is cash flowing but not optimally. Actually, one large cap expenditure in a year would wipe out his years profit.

4. Based on my preliminary numbers, an owner financing deal would give him more cash flow than he currently gets now.

5. I need to understand both sides of this transaction as I don't want to negatively impact my uncle in any way.

Needs as I see them:

My Uncle's - A steady flow of retirement income.

My needs - Equity going into the position and sufficient cash flow operate and improve the property. To make sure I don't miss something and hurt my uncle's financial standing. 

If I need to expand on something please let me know and I will do so. Thanks in advance!

Jose