[Edward Groody]

Edward Groody

I will be purchasing a home to rent, my plan is to rent it for long term. I will have cashflow. The owner is providing seller financing at 4% interest. They still owe 100,000 on the mortgage. I am purchasing the home for 240,000. How do I deal with the remaining mortgage, what kind of legal agreement/structure do i use? is there an article on the website that describes this before i get an attorney? I have one property now with seller financing but they owned the house outright. This is my first time buying with the owner still having a remaining mortgage. Thank you.

[Anonymous]

Anonymous

HI Edward

there are several ways you can handle this

(1) you can wrap the underlying loan with a $240k note

(2) you can buy subject to the $100k note then create a $140k 2nd

(3) You can buy subject to the $100k note, and start making payment on it now then create a 2nd note for the $140k and
not make payments on it for a year or so

(4) you could break the $140 k note in to 2 $70k notes and make payments on then sequencially

The big question is — will the house cashflow with this payment?

You need to structure the notes so the house will have maximum cash flow

Great job on the owner finance at 4%!!!

Jackie