Re: Buying @ 50% of Value. - Posted by Nate
Posted by Nate on February 28, 2001 at 11:42:23:
If the property is generating income, you can definitely get a loan on it. I see you said the current tenant is leaving next month. I assume you intend to replace them.
Once they are replaced with a new tenant, go to the bank and get a loan - I don’t know exactly what LTV and debt coverage ratio your bank will require, but he should be able to borrow 150-160K most likely based on the #s you presented.
Then, once he has the mortgage, like you said, you would pay him. You could do a wrap or contract for deed, so he would give up the title to the property, but continue paying on the loan with the money you give him to do so.
The other thing is, if he gets a new loan, he may want to find out of the new loan is assumable. You might be able to assume it for a 1% assumption fee. However, in most cases the loan will have to be “seasoned” first, so he wouldn’t be able to let you assume it for at least a year. You should ask the local banks in town and find out which one will give him the best terms.