Posted by Monique on March 10, 2001 at 22:02:44:
First, turn off ALL CAPS. It’s as if you are shouting.
Depending on your exit strategy with the property, you might be able to structure a payout on the $35k that meets the needs of the family/friends. Let’s say you plan to sell the property with a 1 year L/O. Then, you might offer to buy the property Subj To the 1st and make monthly payments on the balance with a balloon in 24 months. You should be able to pay it off in a year when your buyer pays you, but ask for the extra 12 months to leave yourself room.
If they can’t do a 2 year balloon, then maybe your exit strategy would be to buy the property for $135K and sell it for $155K to someone who can get a new loan. Market it with Seller Financing, and agree hold a 2nd mortgage to help the buyer qualify. You could take back a 10% 2nd mortgage (and even a little more) if your buyer can come up with $135K between their 1st mortgage and their downpayment.
Or, see if the seller can refinance to pull out the $35K. You take over the payments on the new refinanced loan on the property.