Hello all,
I am looking into buying a home from a friend who is currently renting out his house. He lives in an apartment in order to collect rent money from the renters at his home. He is going to be moving to Turkey in the near future for a job, and I want to pocket the money he is making from rent monthly (if I purchase the house, I would keep the renters living there). He wants to get a lump sum of cash to help him with his future wedding expenses and to purchase a home in Turkey. He currently owes approximately $190,000 on his mortgage at a 3.9% interest rate. He wants to profit a total of $350,000 from the home (I had a real estate agent who I trust look into it and the worth of the home is $389,000 and expected to rise much further).
I have 2 plans on how I can acquire this property, and I need help in figuring out which course of action I should take, or if both are them are crap and if there is a better way of doing this.
Plan 1: I negotiate with him on taking over his mortgage and pay him the lump sum he is asking for with the remaining balance. In order to provide the lump sum of cash, I establish a LLC (I would also use this LLC also for my Airbnb rentals) and I take out a loan and/or 0% credit cards for the remaining balance.
Plan 2: I talk to my financial officer who helped me purchase my current home, set up a mortgage loan through my financial officer and make the down payment of 15% (single family home) by using my Traditional and Roth IRA's.
I feel like with plan 2 I will be giving the bank a lot of money, and both my friend and I are willing to try to accommodate what the other is wanting and would like to do so with minimal amount of money going to a bank and real estate agents. Any help would be greatly appreciated! Thank you.
