Thanks everyone for your responses - it was very helpful to read everyone's input. I actually turned it down.
A few days later, the owner said he is willing to sell the note for 65k, and I assume the loan of 390k...
Does this mean he got an offer and he is doing owner financing? Thoughts on this deal?
Thanks so much!!
No, it means he has a loan of 390 (so some equity) and is willing to sell that for 65k in his pocket, and you'd take over that loan, it would stay in place. Essentially you'd be paying 455k, with 65k down and a 390k mortgage.
You'll have to check that his loan is transferable, and doesn't have an acceleration clause (aka due on sale clause).
Also if he's behind on the loan, as stated in the OP, you'll have to catch it up to current.
See if you can get it for 0 down and have him carry back a second for that down payment. ;) (And make the second like 40k, instead of 65k.)
Also I'm just making up numbers, do some due diligence and comps and cash flow statements to figure out an actual price that it's worth. It may be the case that it's only worth the loan +10k in his pocket. Or maybe you just take it over with no money down, and no second. Or maybe he should be paying YOU to take it over.