Hello all,
My uncle is ready to sell his home. He owns it free and clear. and wants 250k. He will hold a note for 100k. Can he deed the property to me, then I refi for 150k to pay to him? Also Is there a seasoning issue here or not?
Thanks, youngone
Yes there is a seasoning issue for many lenders. However, on a rate and term refi there are many that do not have a problem. If you took the property and gave back a note and deed of trust for the 150 at a higher than market rate you could close the next day at a rate comensurate with your qualifications.
Another way to do it would be to sell an owner financed note.
Afterwards you can do another note and deed of trust for the 100K.
Maybe you can work a simultaneous closing in regards to a note. It depends on what your Uncles goals are but you could put down 5% and then the remaining balance would be put into a note. The note would stipulate what the interest rate would be, monthly payments, and the term of the note. The note could then be sold to a private note buyer at closing for a small discount and your Uncle would be free and clear of the property and you could own a home that you could afford. While this investing tool isn’t for everyone it does provide another outlet to move property quicker and to attract more buyers. I put these deals together and know it can work. Again its just dependent on what your Uncle wants to do. Carry the note for a nice cash flow? Sell the note down the road? Or sell it at closing and be done with it. Take care and good luck
Nate Andree
Thank you for replying. I contacted a couple of lenders that did not have a problem with the amount of time I owned the property. I plan to have it appraised and take a second mortgage on the property worth 90% of the appraisal and carry the balance in a note to my uncle. Since he does not want to wait long for his money I will suggest to him the option selleing the note.
Thank you, Youngone
Youngone,
If your Uncle plans on selling the second lien he is going to take a big discount. He can plan on getting around 25-50 cents on the dollar. I just wanted to let you know if he does think about down the road. He might just want to keep it for a nice cashflow. Take care and congrats on your purchase!
Nate