I had a call from a lady this morning and discussed her property. She is not against doing a Sub2, the sticking point is her son, he is on the mortgage as well. She doesn’t care if her name is still on the mortgage and the payments are being made, but her son does not want to be on the mortgage at all if it sells Sub2.
What would be the easiest way to bring the mortgage back under her name alone?
The other sticking point is this, she would certainly want to be cashed out in three years time. I know William says not to do this, just tell them the payments will be made until the place sells. But she made it clear that there must be an agreed upon balloon payment, 3 years is what she is willing to go for. Has anyone out there done this with any success?
The cash flow on this one would be killer, if there’s a way to pull this off in an intelligent way, that would be great.
In the midst of running my comps and other diligence, but I don’t want to get too far along if these are for sure deal breakers.
Lenders will normally not release anyone who signs on the mortgage as this is how they approved the mortgage loan in the first place.
If the lady refinances in her name only, then you can take the property Subject To.
The other question is easy, just have your buyer refinance within a 3 year period, you should have made some of your money within this time frame. I would also tell her should the property not be refinanced then she would get the property back, unless you are going to re-finance personally.
You are right, the first question is the stumper, unless you have the son convince you why you should purchase the property and leave him on the mortgage, otherwise no deal.
Can you please tell us what the motivation is for the seller. IMO this will help create your plan for further conversations with the son. If they are looking at an iminent foreclosure it shouldn’t be that hard of a sell but if they just don’t like realtors that is a whole different situation. Just a few thoughts.
Also, another option. Why not negotiate a purchase price now that in three years time would be extremely advantagous for you. Worst case scenario you will have a home with some equity, three years of appreciation, and payments made all throughout that time. If you have the means to do so I don’t see how this would be a bad scenario.
