All Forum Posts by: Joseph Zimlich

Good evening BP!

My name is Joe. My family and I are living in the North Bay of California. We've been squirrelling away our job earnings for a long time and spent the year trying to buy a primary residence but the low inventory, high cost and bidding wars left us without. So we've decided to pivot and put our down payment to work with REI. It's something we always talked about doing and we're doing it.

I've still got my job in the airport business and my wife is playing super mom. We're targeting buy and hold and BRRRR strategies (probably out of state) to gain financial freedom but are open to learning anything and everything.

Yoroshiku onegaishimasu!

Good afternoon BP, I'm Joe and I'm a new REI in northern California.

I'm in the preliminary stages of vetting an off market deal with the family of a friend.  The current owner is an older gentleman who's family would like him to move to a senior facility.  My conversations so far have mostly suggested they would just need enough to cover the existing loan.  Here's what I have so far:

The House

The house will need a heavy renovation to be worth anything to anyone, probably including but not limited to a new roof and septic system.  Given that it's not on municipal water, the large lot size AND the considerable costs of the project, I don't think keeping it as a rental is the right choice for me.  Despite the tax implications, I believe flipping is Plan A

Financing

I have good credit and cash.  I would qualify for traditional lending, however I've been told that I'd need to hold the property for a year and as I said before, I don't think that's right for me.

A hard money loan for the purchase and renovation would be the most straight forward approach, but the higher carrying costs could easily break the deal if the project didn't stick to schedule (but that never happens right?)

I'm considering suggesting seller financing with a balloon payment.  If I can lower the interest rate and down payment requirement, I'd have more wiggle room to use my cash for the reno rather than working it into the loan as well as maybe giving the seller a little extra cash for his trouble.  However, I definitely don't have enough investable cash to cover what is owed currently and at least one source I've read says that means I would need the bank's approval of the deal.

So here's my primary question: How likely and/or complicated would it be to assume the title and loan? I've read a couple articles that says the kinds of mortgages you can assume are few, but a more experienced BP member told me it's no big deal and doesn't require bank consent.

Related question, am I really talking about assuming a loan or would this be a Subject To sale (I'm still trying to figure out Sub2, much more reading is needed)?

Thank you all for your input. I'm still very early in the process but I'm trying to get ahead on the options before I meet the owner in person.