The Ideal Mobile Home Park for Your Investing Business

Source: https://thinkrealty.com/ideal-mobile-home-park-investing-business/

I was offered a mobile home for free last week. Score, right? No, I turned it down. I could keep it in the park, but it needed more work than… more

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Are you thinking of investing in real estate? However, you don’t have enough cash to do so. Here is a tip you can use as long as the person selling the property is willing to negotiate with you.

To be fair, not all sellers will be interested (or even understand) the concept outlined. Your best gamble is to locate a property that the owner has great desire for offering it, whether because of moving, divorce, or frustration with the people renting the place.

Actually, if you are currently renting and thinking of using this strategy perhaps the owner would be happy to assist you! There are some variations that could be used depending upon you and your seller. Do they want the market price or are they just eager to get out from the monthly payments – perhaps facing foreclosure?

The simplest 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 obligations while the property remains in the seller’s name.

You take over the original mortgage and create a 2nd mortgage on the remaining cost of the property with the seller. Offer a high, interest-only payment for a short time frame – 2 or three years. Rather than having the money stay in a bank they could be collecting a high interest over two or three years with the remainder due in full at the end of the investment term.

When the term draws to a close you need to be able to refinance the cost, or else you can sell. Unless you hit a real bad market the value of the house should have risen in that time.

Most mortgage lenders merely need to make a great investment. While your local bank could still be scared there are lots of financial lenders that would wish to make a deal. Financiers prefare real estate. The mortgage is usually based on 60-70% of the value of the land, so as long as they understand they get their money back in the value of the property if you default, they don’t care what sort of revenue you make. Complete the deal with a second mortgage done with the seller. If you default they can eventually foreclose on the property and sell it, paying down the existing mortgage in the proceeds.

Now you can observe the entire picture. It is good that seller and buyer can work together. If they can’t wait for a sale, you could still give them their initial price with a little versatility on their part.

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