Sub2 Seller Wants To Buy Another House
Hello, first post & any suggestions would be appreciated. Thanks in advanced.
I'm about to do first sub2 & L/O to buyer deal. Have parties lined up & numbers done, looks like win-win-win situation.
My problem isn't w/ the deal itself but after the deal. The seller wants to buy another house in about 3-6 months but his rate and PITI would be high due to DTI (debt to income) issues of having 2 loans under his name. He wants to buy a new home in a new development area so creative financing is out. My buyer isn't able to qualify for a loan and I could refi but credit sucks and the PITI would go up alot, putting me at negative cash flow by a couple of hundred $$ w/ buyer or pricing me out of the avg rent rate in the area. (I know all this cause I'm the mortgage broker representing the seller for new home, buyer when ready to buy house and myself for refi) No equity in property to sell for profit, L/O option only way to make money (back end). Not enough money to bring in partner.
I'm afraid that when a seller is ready to buy another home and finds the current loan hurting his chances, he might ask for the loan to be paid in full or go behind your back and tell the bank that title has changed hands, thus DOS clause.
Should I just walk away from this deal and just find another way to help seller sell his current home? Also how do you deal with a sub2 seller who is planning on buying another home w/i a year, is L/O option out, would you have to be able to sell prop for profit right? Does the DOS effect the seller also because loan is still under his name and foreclosure would then appear on seller credit?
Thanks for any responses
Jerry 
geo_choy,
Glad to meet you.
I could go into great detail on how this is done, however for space sake here is what you do.
Find any Mortgage Broker worth his salt and ask him how they get the job done in the situation you are talking about.
When he explains it to you then explain it to your seller. Remember they do not make any money unless they get someone financed.
Welcome on board this board, I have said for many years good Mortgage Brokers are every bit as creative as real estate investors.
John $Cash$ Locke
John
Thanks for the reply
I am the mortgage broker and I am as creative as they get. My problem isn't getting financing for the seller, I am able to do it, problem is the seller isn't getting the best deal because of the 2 loans and he knows it (I told him).
Thx
PS does your program cover this, just bought it this morning
when seller goes to get another loan he just needs documentation from you to confirm than his first loan is being covered by you. Go to the loan officer with your seller.
geo_choy,
Private message me here at TCI with your phone number I will give you some creative ideas to help your seller.
John $Cash$ Locke