I’m looking at property with two houses on it, both currently vacant. Owner bought the property in August of 2004, did a rehab, and is flipping it. He’s fallen out of escrow a couple of times due to Buyer’s not being able to secure financing. The property is currently for sale by a Realtor whom I’ve already spoken to and she’s almost positive he’ll take my offer. I plan on living in one of the units and renting the 2nd unit. If I were to rent them both, it would be break even for me, my gain would be equity in the future. Asking price is $435k, I’m offering $430. Properties in the neighborhood are up to around $900k for SF larger homes on larger (2 ac.) parcels (this lot is only around 15k sq.) and total of both houses just under 1900 sq.
I’m looking at getting into this property with pretty much nothing down, subject to existing financing, with the owner carrying the balance. The owner needs some cash out so I suggested he/she get a 2nd or a new 1st. mortgage to pull out some equity (up to 90% of appraised). I asked to wrap both notes together (mortages and seller’s carry) which I would pay 5.25% interest, amortized over 30, due in 5, regardless of sellers interest and payments. He needs out because he’s paying on two properties right now. NOTE: I offered him close to his asking price because the market is HOT HOT HOT here in California and my offering interest rate is LOW LOW LOW.
Here’s my question… is there an issue that I may not be aware of by having the Seller obtain a new mortgage on the property??? Because I don’t plan to sell anytime soon and am looking at this as a residence… I’m not too concerned with seasoning (more worried about the DOS).
What other problems should I encounter.
Also… this is my first subject to… (I typically do tax sales which are no brainers when you research the props). I have a contract and addendum filled out but I’m not sure if I’ve covered everything. FEAR is holding me back from sending this offer… .
Thanks,
Stella