By Harrison Pinkus, Interra Realty Though many multifamily investors have been able to close transactions in today’s less-than-ideal economic climate, high interest rates remain a challenge for some. However, there is one strategy that can propel a deal over the hurdle of high interest rates and across the finish line: assuming the seller’s loan. With plenty of investors looking to acquire assets despite elevated rates, loan assumptions offer a win-win opportunity, as long as the buyer and seller surround themselves with a knowledgeable team of brokers, attorneys and lenders. The biggest advantage for buyers is a lower financing rate than what is currently available on the market. Buyers also benefit from lower closing costs and no appraisal. Meanwhile, loan assumptions at a lower rate provide sellers with the leverage to command a higher asking price for their property. Loan assumptions are by no means the only route to closing a deal in today’s environment. After all, investors can always move ahead with a purchase now and finance at current rates with a plan to refinance later if rates improve. But, since the buyer must be able to acquire debt financing and carry a higher rate for a year or more …
