All Forum Posts by: T. Alan Ceshker

I did a loan assumption that is currently a GIANT pain in the ***. I’m here to share my story for whatever that’s worth.

Over a year ago I did a wrap around mortgage on a place here in Phoenix at 3.5% over 27 years. Everything was smooth until it wasn’t. 6 months into it the tenant called and the toilet had failed in an upstairs bathroom. The house was flooded to the tune of $70,000 in repairs. 

No big deal, I worked with insurance and contractors to get the repairs done. Six months later my insurance dropped me and here is where it gets sticky. I got a new insurance policy at a higher rate. I let the original borrower know they needed to update the lender on the new insurance policy. 

The higher insurance premium required a higher escrow payment which the original borrower didn’t let me know.  A few months go by and unbeknownst to me the escrow account had now drawn negative which triggers the lender to no longer apply what’s considered a “partial” payment to them, given that I’m now paying less that what’s due given the escrow increase required but not relayed to me even though I expected it at some point.

Last month I’m on Zillow looking at the value of my properties. One of my properties says it’s going to auction in March because it’s being foreclosed on. My heart rate goes through the roof as I have about $90k in equity in that house. I reach out to the original borrower and ask them what’s going on. They weren’t paying attention to it, and why would they, it’s not their house anymore. 

They send over 3 months of notices from the bank. $10,000 has been collected by the lender and is in an “unapplied” status due to the short payments. They are foreclosing and are not open to discuss it. I call them, they won’t speak to me about the loan at all BECAUSE ITS NOT IN MY NAME. 

I have to sell it, but guess who has to request the payoff amount from the lender….thats right, the ORIGINAL borrower. So I am at the mercy of that person for basically EVERYTHING.

I am still waiting on that payoff amount 9 days later and am up against a clock where they have scheduled the home for sale at auction come March.

Take it all for what it's worth, I've learned plenty of lessons and made my share of mistakes. One thing is for sure, if I ever wrap another mortgage I am getting a POA to access the docs on the original loan so that I am never again at the mercy of that borrower to relay information. If it wasn't the insurance it would have been the property taxes. FFS

THE END. 

Let me know what you would have done differently?!

@Ryan Mcpherson

BE VERY CAREFUL IF SELLING "SUBJECT-TO"!

It can be done ethically, but you need safeguards to confirm mortgage & possibly property tax payments made on-time, as well as insurance with you protected.
- Also, you need a legal way to take back the deed if buyer defaults!
- Land Contract would be better:)

Question: how are you going to lose $2500/month if you rent?
What did you pay for it?
What do you owe?
What is PITI?

Moved to Austin for work and purchased a home in 2021 with just under 4% interest rate. Due to circumstances at the time I was able to put 0% down without PMI. Fast forwards to 2025 and I need to move again for work. Since purchasing the home, housing market in my area has declined about 20%. This puts the home underwater.

I've calculated the following two options:

1. To sell the house, it would cost me about $60,000
   out of pocket.
2. To rent the home, I would lose about $2,500 per month (based on comparable rents in my area, property management fees, etc).

Both options loose the same amount by roughly 2 years, and by this time, I still will not have built up much more equity in the home to make selling it a break even unless there is price appreciation by then.

My dilemma is this: I speculate that my home will not appreciate much in the next 3-5 years due to the rapid pace of development in the surrounding area.

In 5-10+ years, maybe, but by then I'll have bled $150,000 - $300,000.

I have thought about this a lot and feel that I mar'-too close to the problem to see the best solution.

Any constructive advice would be much appreciated.

Hello, everyone!

Excited to be diving deeper into real estate investing and making time for my first deal. I’ve been exploring various strategies to land a solid rental property, and I’m particularly interested in trying mortgage assumption for this one.

I'm currently looking at a property listed at $350K. It was originally purchased for around $150K in 2020, with a $50K HELOC added in 2022. I'm collaborating with an investor who can help cover the remaining balance, but since the property isn't in the best shape, and maybe fairly priced, but I'm evaluating how much room I might have to negotiate. It does seem competitively priced for the area.

If anyone has insights into how the existing HELOC might impact the mortgage assumption or tips for negotiating on a deal like this, I'd greatly appreciate it. Looking forward to hearing your thoughts!

Thanks in advance,
David

Hi BiggerPockets Community,

My name is Zach Rumfield, and I’m new to real estate and wholesaling. I’m currently based in the Houston market, looking to build connections with wholesalers, investors, agents, and others in the industry.

A little about me: I’m 25 years old, originally from Corpus Christi, Texas, and I now live in the Memorial area of Houston with my wonderful fiancée and our Maltipoo puppy. I’m a former college baseball player and retired professional ballroom dancer, with a passion for entrepreneurship and real estate investment. I’m also a big enthusiast for health and wellness, always striving to improve myself and learn more.

If anyone in the Houston market would like to connect or has any advice for someone just starting out, I’d love to hear from you!

Best regards,
Zach Rumfield

 We would not be happy at all. But people are still doing this all the time and I am trying to understand and learn about it.

New to real estate with a few transactions under my belt. Starting my own investment journey and looking to begin acquiring more properties and learn from other investors here.  Also happy to assist others with their sales and acquisitions.