My one freind assumed the debt of a apt building and didnt have to put any money down is that possible and what is that called? “desperate seller” assumable financing" etc All the assumable ads i find are for 80% or less of the total price and the rest they want as a dp What are some ways to raise the remainder 20% + to close of the deal ie rehab loans 2 and 3 rd mortages before closing on the property etc.
Howdy Buysmart:
It is first off sad that you only have one friend. I will be your friend too and now you have two. Anyway, a little humor, very little right?
If they assumed the loan it is called an assumption and if it was a zero down deal it is called a zero down assumption. It may still be a bad deal. Usually this means that the seller owes too much but do not know the facts here.
There are several ways to get the cash to close:
With a 620 plus score you can get 100% financing from lenders on residential deals by several methods including the seller financing a small portion or the lender doing an 80% 1st and a 20% second.
You can do like me and get a hard money loan for the 1st 95% of the purchase and rehab and get private 2nds for the 5% plus upfront rehab start up money.
You may also use credit cards to borrow the money or relatives.
I also used to get govt grants but these rehab funds are almost non existent today.
<aybe some other members will add to the mix especially Carlton Sheets students.
I plan to buy a property under a REIT. The ones I am looking at are multi fam 60 units on avergae. I under stand there are two types of assumables the non qualify ( i love this one) and the qualify… With the qualify assumable on say a 1 mil purchase are they going to want to see thats the reit has assets or…?
Howdy Buysmart:
My dad manages several REITS as chairman of the board. Look up Ted Stokely on Google to get a look see. They buy and build millions of $ worth of stuff in the name of the REIT and also non profits. They show the assets etc of the companies to get million dollar plus loans and put down 20% most of the time in cash. They do not personally guarantee a cent. It is just a really nice job for my dad. I will be there one day hopefully in his foot steps.
Why are you doing a REIT. I believe they are a pain to manage especially with the SEC. You can probably still do a low or no doc loan and even stated income. If the REIT is just a shell you probably will have to personally guarantee the debt.
heres the deal 3.8 mil assumable 1st and a 3 mil rehab Hard money
the rehab hard money loan seems to be in the bag. The assumable is a qualify so how do i appease the assumable 1st.
Howdy Buysmart:
I am surprised you can get a 3M hard money 2nd. I do not know your financials but the 1st lender will want to know your credit, financial statement etc to even consider the assumption. If you already have the HML approved this may help you get the first assumed especially if the property is in bad financial condition.
I once was involved buying a REO from the bank that MRS LBJ owned. It was bank financed with $50K down. I kept asking for a loan application and got no response. We showed up at the closing and signed the papers and they financed the purchase as agreed. No application etc. They at the time wanted the liability off the records.
If the property is in bad shape then I would approach it as you are doing them a favor by rehabbing the property and you might assume the loan if they are good to you. Kind of act like you are doing them a favor. It may work???
Re: the Hard Money Loan (2nd) that is “in the bag”
Are you absolutely sure the Hard Money Lender knows they will be in second lien position???
Most HM Lenders want to be in 1st position!
However, if you have a good relationship, perhaps it is not an issue with your lender…