Is What I Want To Do Possible?? Please Advise
Ok heres the deal
My dad has a house under "option to purchase" contract for 28k, all closing cost paid by buyer.
We have a buyer at 44k, but he cannot get financing. We had planned on assigning the contract to him, and we just make the difference as an assignment fee.
Is it POSSIBLE for my DAD to take back a 2nd mortgage in this contract, so that the buyer can get financing easier? I know that he never assumes title of the house, so I am assuming he cant do this without actually purchasing it, paying closing costs, then turning around and selling it to the other guy. In this case, would that be called a "double closing" and would the usual costs be incurred?
Any clarifications and suggestions would be appreciated.
Good Day to you: As I see it, your dad can become a hard money lender and file a 2nd mortgage against the property just as a lender would do. I would not do it without a premium as the buyer does not have good credit. I would raise the price to $ 48K and then whatever he can't qualify for, take in a second. Try and get as much money down as you can, so when he goes belly-up, you will have covered your costs.
Good Luck and make $$$
Tom
add your dad's closing costs and some to the price and have signed agreement inhand.
then proceed to purchace, If your father can buy it out right then sell it to new buyer for newly agreed upon price and at a good interest rate. your dad would then carry a note on the house as if he were a lending institution. once it is in the new owners name, he can refi ( they will have to pay a premium), and pay off your dad's note on the house.