Today’s podcast is on how to use direct mail successfully in your REI business. You will notice I said successfully. There is a right way to do it and a wrong way. Doing it correctly will get you a steady stream of leads over time. It takes a while to get momentum. But once you […]
The post How to Use Direct Mail Successfully In Your REI Business – Podcast #89 appeared first on Louisville Gals Real Estate Blog.
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Are you thinking of investing in real estate? However you do not have enough cash to do so. Right here is a tip you may use as long as the property seller is willing to negotiate along.
To be fair, not all sellers will be interested (or even understand) the concept outlined. Your better gamble is to find a property that the owner has great interest in offering it, whether because they are moving, divorce, or they are frustrated with the people renting the place.
Actually, if you maybe currently renting and thinking of using this technique perhaps your landlord would be happy to help you out! There are a few variations that may be used depending on you and your owner. Do they desire the market price or are they just desperate to get out of the monthly payments – maybe facing foreclosure?
The easiest method is to take over their mortgage payments – called ‘assuming’ the mortgage. You will have to be approved by the original lender to presume the mortgage. If you cannot get approved for an assumable mortgage you could as well try a ‘subject to’ assumption where you merely make payments while the property remains in the seller’s name.
You take over the original mortgage and make a 2nd mortgage on the remaining cost of the house with the seller. Offer a high, interest-only payment for a short time frame – two or three years. Rather than having the money sit in a bank they could be collecting a high interest over 2 or 3 years with the remainder due in full at the end of the term.
When the term ends you should be able to refinance the cost, or you could sell. Unless you hit a real bad market the value of the home should have risen by then.
Most mortgage lenders merely want to make a great investment. While your local bank may still be lacking confidence there are plenty of financial lenders that would like to make a deal. Financiers like property investing. The mortgage is mostly around 60-70% of the value of the land, so as long as they know they get their money back in the value of the property if you default, they do not care what sort of revenue you make. Complete the deal with a 2nd mortgage created with the seller. In case you default they could still foreclose on the property and sell it, settling the existing mortgage in the proceeds.
Now you can see the whole picture. It is better that seller and buyer may work together. In the event that they can’t wait for a sale, you could still give them their asking price with a little overall flexibility on their part.