Don't Get Cute

Buenos Dias, People?
Beware of situations and opportunities that are served with phrases like "They won't find out", or "I never got caught", or "I just learned this new form of torture. Let me show you, it won't hurt". These, and others, are red flags and should be avoided like water boarding.
Like this deal my client was considering. A nice duplex that was well remodeled. The rents were a little low, but the renter was willing to come up a little on his rent. The best part of the deal was the loan that the seller had that could be assumed (Meaning the buyer would take over the existing loan from the seller. Has nothing to do with the "makes an ASS out of U and Me). Assuming the loan would be less expensive for my buyer because no new loan fees or appraisal. The existing loan was also a 4.25% interest rate, super sweet for an investment property (Usual rate for a non-owner occupied or investor loan is currently around 6%, give or take). Gots to do it, right?
Well, after looking at the loan it turned out that it was a variable loan that adjusted every 6 months. Not great, but still workable. Then we found out it was an interest only loan, not exactly what my client wanted. Then we found out the loan was to mature (Bank wanted it's money back) in another 8 years. None of these things were on my client's wish list, but they were not ugly enough to scare her away. Then the ugly came.
We found out that this "assumable" loan was not sanctioned/ O.K.ed/ allowed by the bank. The seller's sweet deal turned into my client giving him a big chunk of money, him signing over the deed and my client would simply start making the payments. Was (It's German, meaning what. You're supposed to say it with a "V" sound and kind of Gestapo, coy like)? We asked him what would happen if the bank found out? He said "The bank could make you pay up all at once, or raise the interest rate or a # of other things. I don't really know, it's never happened to me". We asked how would she get the payment (Just out of curiosity, it's dead by this time). "I'd send it to you. And don't worry, I'll make arrangements to have the payment mailed to you if I die (He was very old)". We shook his shaky hand and said no thanks.
So, watch out for super great deals that you have to get overly creative with. Sometimes the word creative is code for fraud.
Let me know about your tricky deals, or escapes from them.
619-507-7449.
God Bless