Posted by tmofa-IN on February 06, 2004 at 18:08:58:
Well a couple of things. 1st DO NOT assume the loan. 2nd DO NOT sign anything stating you will be personally responsible for payments. Also make sure you get the seller to sign a disclaimer that they are aware the due on sale clause may be used by the bank, if the bank does find out.
Next you can negotiate for more time, or can make the payments yourself.
Ask for more time up front, negotiate for 4,5, or 6 months instead.
Ask him how much he can afford to pay per month and you make up the difference until you find a lease option.
Your scenario states about $12K back end profit. Not much but you’re not investing either.
What is the approximate rate of appreciation? The monthly mortgage is being paid down and if the rate of appreciation is decent The back end will only go up.
But say you only negotiate 3 months payments from the seller. If you do not find a buyer in three months, you walk away…nothing out of pocket. Please makesure you notify the seller.
Keep in mind though, you’re telling me it’s in a decent neighbourhood and “like” houses are going for $170K, you should be able to get a seller in that time, if you get worried even sell it for less. But you also have the option of low down, no bank qualifying (Lease Option) it.
Example, advertise as I just said with out the lease option printed. L/O for 2-4 years, selling price $180K or more some would say go for $190K or so. should get $6K - $10K down at least, monthly PITI already higher than your payments, plus ask how much extra they can pay a monthly as rent credit.You get to keep the down payment. You get to keep the monthly cash flow, and you still have the back end.
Shoot…you should be able to find a seller.
BUT DO YOUR DUE DILIGENCE.
Again, I’m not an expert…hopefully one with support or refute the advice I have given.