Question:
(This is actually from an agent interested in buying one of my listings for himself.)
“I’m interested in buying your fourplex. What if we took over the payments without telling the lender – never had the experience of lender calling the loan due – they just want to get paid. And we could put 5-8% down to cover closing costs, then make payments to the seller on the rest. Will your clients agree?”
Answer:
You must have been to a very creative real estate investing seminar!
In representing the seller, I have advised them against your proposal for several reasons:
- Leaving the loan in their name would hurt their ability to get other financing.
- And it means if you pay late or – worse – lose the property to foreclosure, it hurts their credit, and not yours.
- Your small down payment means you have little money at risk if things go bad (see #2).
- These clients want to use the proceeds for other things. You propose only that they get enough to pay the selling expenses.
