Anyone split a blanket mortgage? (long!) - Posted by Izzy NY

Posted by Debbie on October 19, 2002 at 01:59:44:

I also have a blankrt problem!

  • we own 19 properties + 1 restuarant
    11 three bedroom homes,
    8 multiplex
    31 rental units in all
    16 properties are in a blanket loan
    4 of the 16 are sold on contract
  • some of these people would buy if they had financing
    4 we are purchasing on contract
    We want to refinance these also
    *Lincolnville restuarant: sold on CONTRACT
    We would like to refinance-so would buyer
    OUR GOALS: pay down debt/fix credit
    market value all property $912,681.80
    total debt $660,784.31
    net equity of property $251,897.50
    debt incurred fixing up properties
    $80,000.00 credit cards
    $20,000.00 other debt
    leaving 151,897.50
    MAY NEED MORE THAN ONE LENDER TO BREAK OUT OF BLANKET LOAN
    we enjoyed a nice income and excellent credit for 7 years
    PROBLEMS in the last 18 mos. have caused:
    CREDIT SCORES ARE LOW debt to income high
    some late payments
    scores have dropped from 700?s to 525
    This year has been a bad year, son went to collage
    sale of restuarant fell though
    put a lot of money into fixing up properties
    CREDIT CARDS
    roofing
    carpet
    labor!
    down payment on properties
    DO HAVE POSITIVE CASH FLOW
    Could have better income with cards gone.
    we believe appraisal values stated above are a little low
    I believe with some capital to work with we can recover rapidly
    ANY IDEAS WOULD BE VERY MUCH APPRECIATED

(260) 569-7587blanket problem.

Anyone split a blanket mortgage? (long!) - Posted by Izzy NY

Posted by Izzy NY on October 17, 2002 at 13:33:01:

hello!

My friend and I want to buy four condos as an investment.

I want to buy them two in my name (solely), and two in my friends name.

The four are being sold as a packeage because there is no release clause in the blanket loan the curent owner has, nor can I assume the loan.

How do we structure the closing? Should we ask for seperate contracts for each unit? (or per 2 units?) Or is this not possible because then they can get stuck somehow by us closing on two and not on all four?

Or should we schedule four closings together? then split em at the closing? Has anyone done this?

All help greatly appreciated!!!

“Thinking outside the box”

Izzy

Re: Anyone split a blanket mortgage? (long!) - Posted by GL(ON)

Posted by GL(ON) on October 17, 2002 at 19:10:38:

Are you going to pay all cash, or get new mortgages someplace else? You have to pay off the mortgage before you can register them in new names.

Just tell the lawyer or title company what you are doing, they will arrange the details.

Re: Anyone split a blanket mortgage? (long!) - Posted by Eric C

Posted by Eric C on October 17, 2002 at 17:40:47:

Hi -

I would hope that you are getting these at a “package” price. Just because the present owner was silly enough to tie all these together without release clauses (or because s/he can’t figure out how to get the bank to agree to one) doesn’t mean you should just step into the same mess.

Release clauses are standard practice. All banks know about them. They (the clauses) just cost more AFTER the fact than they do when the original deal was written.

So, either you’ve got an owner who doesn’t know how to deal with the lender (or doesn’t want to, hmm?) or they just want to be rid of these things.

How you approach this has a lot to do with your skill level and your game plan. Are you going to hold these? Resell them quickly? What?

Take care,

Eric C

PS - I don’t mind helping folks out of those “blankets” that have become too restrictive for them, but I would never (NEVER) sign one of these things myself. What would be the point?

the seller would prob. not agree, because - Posted by MW

Posted by MW on October 17, 2002 at 16:40:17:

if trhe seller agreed, and you closed on two but your friends deal fell through, they’d be stuck…

so I doubt you can do that. rater get a hard money loan to buy in a corp as partners, then dissolve the corp and split assets 50/50, then refi two and your friend will also.

cheers!

MW

I want to buy them without a blanket!! - Posted by Izzy NY

Posted by Izzy NY on October 17, 2002 at 18:43:04:

I do not want a blanket mortgage at all!

I want to buy them seperately, but want to know IF they can be sold to seperate people if the closings are not the same day…

Thanks!

Re: I want to buy them without a blanket!! - Posted by Jim Rayner

Posted by Jim Rayner on October 17, 2002 at 22:15:36:

Izzy,

The first apartment building I purchased was one of 4 apartment buildings under a blanket mortgage. To make matters worse it was also a short sale. I had to wait until 4 buyers were under contract to close, about 5 months.

The lender GMAC Commercial required that all 4 closings occur the same day. Seller used a POA to be at all 4 closings at the same time.

This was more of a planning problem than anything else. The day of closing went well.