No Money Down Gets Complicated
From a No Money Down Course, I included the "approach" in order to get your feedback. Do any of these suggestion make sense?
In the quoted text below, the seller obtains a $25,000K bank loan effective when I assume ownership...??
Since the loan will be from the bank to the seller, in the seller's name, how could I possibly include that money in what I'm paying the owner? Does the loan responsibilty transfer to me the new owner of the property, somehow?
QUOTED:
1. You negotiate with the mortgage company for an assumption the 8-unit apartments' existing $90,000 mortgage [15 years remains according to course; $65,000 payoff APPEARS to remain according to me] at a new, higher rate that is still below the market, generating $90,000 of the total $180,000 offered and accepted for the building.
2. You ask the seller to arrange a second mortgage of $25,000 with a bank that will take effect when you assume ownership.
3. You agree to make payments on the owner's $14,000 debts.
4. You ask the seller to carry a $35,000 note at eight-percent interest only, payable monthly for seven years.
5. You offer your motor home valued at $15,000 to complete the deal.
6. Basically, the seller gets $25,000 cash via the second mortgage, the motor home, $233 a month extra income without any extra work, his debts assumed, and a $35,000 nest egg [Nest egg...looks like about the 4th loan going on to me--there was also a credit card renovation of 3 units. I'm up to 5 loans now.] In return, you are getting a building, which will produce a positive cash flow without any cash outlay.
Thanks All!
Alan[ Edited by fearnsa on Date 03/24/2004 ]
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