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About geocan10

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  1. I have a purchase agreement to buy a condo apartment from a private seller, and am looking into flipping it to a new buyer. I got a very good price there. However, I would expect the new buyer to have a mortgage in order to buy this place. Yesterday, I met this experienced mortgage broker (namely Chris), and he warned me that it is very difficult for a buyer to obtain a mortgage from an assignment contract. Lenders would usually not consider funding an assignment deal. So, I also asked him whether double closing would solve the problem, and his answer was that a buyer would have problems obtaining a mortgage from double contracts. The reason is that when the lender verifies the title and other documents, my name won't be there as the owner. The lender would most likely refuse to initiate a mortgage then. He did say that he had helped fund many assignments deals with commercial RE though. He mentioned that commercial RE deals have totally different rules from residential ones. According to what I have read from this forum and many other ones, this came to be a shock to me. Are Chris' comments really true? Any solutions to Chris' suggested problems, ie. for me to actually find a qualifying buyer via an assignment or double closing? I am not sure if things could be different here in Canada from USA. This is my first flipping deal, and I am anxious to see all the kind responses to this post. Thanks a bunch!
  2. I am negotiating with a homeowner now, and I got a really good under-market for a condo. I intend to do a quick flip before closing. However, as Plan B, I do need to secure financing for the property just in case. Since I am in Canada, subject-to does not seem to work too well here, since we have a centralized Land Title Office that holds all deeds. Banks will be notified automatically for a title change. However, the seller is willing to leave the exsiting mortgage in place, and engage into an Installment Sales Contract. In other words, we will lay out some payment terms in the contract, and the title would only be transferred after certain conditions are met. I was researching on Installment Sales Contract, and it seems that there may be some pitfalls for the buyers. Could some gurus please share some specific precautions before I lock myself into such a deal? Thanks a bunch!
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