Loan Assumptions in Real Estate Transactions: Benefits, Restrictions, Strategies, and Risks
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE webinar will discuss how the unprecedented rise in interest rates has led many real estate investors looking to acquire real property to consider assuming a seller's existing debt with low fixed interest rates. The panel will discuss the unique considerations for buyers, sellers, and lenders in such transactions, including negotiation tactics for the purchase and sale agreement, diligence with respect to the existing loan, and the advantages and disadvantages of a loan assumption versus seller financing.
- Overview: current market conditions and the potential of assumable loans in real estate investment
- Benefits of a loan assumption for the buyer and seller
- Downsides to a loan assumption for the buyer and seller
- Purchase and sale considerations
- Seller's representations and warranties regarding the existing debt
- Lender's approval of the loan assumption
- Loan assumption timeframe
- Assumption fees and other costs
- Assignment of reserves
- Survival period of loan assumption provisions
- Diligence best practices when an acquisition includes a loan assumption
- Steps, strategies, and mitigating risks in executing assumable mortgage deals
- Loan assumptions vs. seller financing: pros and cons
- Lender and loan servicer considerations with respect t to mortgage assumptions
- Key takeaways
The panel will discuss these and other key issues:
- What makes the current market conditions ripe for an increase in loan assumptions in real estate acquisitions?
- What are the benefits and drawbacks of mortgage assumptions for buyers and sellers versus seller financing?
- What are the diligence best practices when a real estate acquisition includes a loan assumption?
- What are the key factors for lenders and loan servicers to consider when evaluating a loan assumption?
A. Andrew Demirchyan
Allen Matkins Leck Gamble Mallory & Natsis
With a strong background working in nearly all aspects of real estate in California – from property management,... | Read More
With a strong background working in nearly all aspects of real estate in California – from property management, residential and commercial real estate transactions, to real estate development and preservation work – Mr. Demirchyan skillfully aids clients in navigating complicated and ever-changing real estate laws. He represents developers, owners, and financial institutions in complex commercial real estate transactions, including secured lending, commercial leasing, acquisitions, dispositions, and Mills Act matters. Prior to joining the firm, Mr. Demirchyan served as the Deputy White House Liaison for the U.S. Department of Housing and Urban Development.Close
Scott (Mac) MacPherson
Patel Law Group
Mr. MacPherson represents clients in finance, commercial real estate, and various other types of business transactions.... | Read More
Mr. MacPherson represents clients in finance, commercial real estate, and various other types of business transactions. He has represented buyers, sellers, and lenders in a wide variety of commercial and residential real estate transactions working with a multitude of communities and cultures. In addition, Mr. MacPherson has helped his clients form companies and corporations for new ventures and business acquisitions. He is also involved in asset management for national, hard money lenders and has managed over $2B in his national portfolio.Close