Real Estate Investing Profits Episode 13 Dave Payerchin

Source: http://youtu.be/UQkmiA-2Tls

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Are you thinking of investing in real estate? But you don’t have enough cash to do so. In this article is a tip you are able to use as long as the property seller is willing to negotiate along.

To be fair, not all sellers will be willing (or even understand) the concept outlined. Your better wager is to find a property that the owner has great desire for offering it, whether because they are moving, a divorce settlement, or they are frustrated with tenants.

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

The easiest way is to consider taking over their mortgage payments – called ‘assuming’ the mortgage. You will have to be approved by the first lender to presume the mortgage. If you cannot get approved for an assumable mortgage you may as well try a ‘subject to’ assumption where you merely make payments while the property stays in the seller’s name.

You take over the first mortgage and create a second 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. Instead of having the money sit down in a bank they can 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 ceases you should be able to refinance the cost, or else you could sell. Unless you hit an actual 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 could still be scared there are plenty of financial lenders that would want to make a deal. Financiers prefare property investing. The mortgage is usually based on 60-70% of the value of the property, 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 income you make. Complete the deal with a second mortgage created with the seller. In case you default they could eventually foreclose on the property and sell it, settling the existing mortgage in the proceeds.

Now you can see the entire picture. It is good that seller and buyer can work together. In the event they can’t wait for a sale, you could still give them their asking price with a little overall flexibility on their part.

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