Taking Over A Mortgage
I have an associate that wants me to take a mortgage out on his property. He is an investor and plans to develop on the land of the property. The mort will be for 320,000. He said he will give me ten thousand for doing it and he will pay the mortgage. He will give me 12 months post-dated checks for the mortgage. My credit is good and I know he has the money and will pay the mortgage because he wants the land. Is this a good deal?
I think that "Is it a good deal?" is something you have to figure out for yourself... Is ten thousand dollars worth it for you? Do you think that is adequate compensation for tying up $320,000 worth of your credit for how ever many years it will take to develop...
[addsig]
What will you use to collateralize the loan? It is not clear from your post that you will purchase the property from the associate, or just give the associate an unsecured loan for $320K.
Seems a little awkward for a lender to put a lien on someone else's property as collateral for your loan if the someone else is not a co-borrower for the loan.
How can you take a mortgage out on somebody else's property? Is there a balloon at the end of 12 months where the loan is repaid? Why will he be able to get that much money in 12 months, but not now? As the other person asked, what kind of collateral are you using? The land? What's FMV on the land?