Real estate investing is not a solo sport. It requires a strong support team to be successful in mastering the learning curve and to increase your productivity. Each roll on… more
The post Pump up Your Productivity appeared first on Think Realty | A Real Estate of Mind.
To stay updated with the latest in the real estate industry to can visit our real estate latest news. On the other hand if you are beginning real estate investing and would like to start profitable real estate investing now download a copy of our profitable real estate investing ebook.
Are you contemplating investing in real estate? However you do not have enough money to do so. In this article is a tip you may use as long as the property seller is willing to negotiate with you.
To be fair, not every seller will be interested (or even understand) the concept outlined. Your best guess is to locate a property that the owner has great desire for selling, 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 glad to help you out! There are a few variations that could be used depending upon you and your vendor. Do they want the market price or are they just eager to get out from the monthly payments – perhaps facing foreclosure?
The easiest way is to consider taking over their mortgage payments – called ‘assuming’ the mortgage. You will need to be approved by the first lender to assume 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 remains in the seller’s name.
You take over the first mortgage and get a 2nd mortgage on the remaining cost of the house with the seller. Offer a high, interest-only payment for a short time period – 2 or three years. Instead of having the money sit 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 term.
When the term ends you ought to be able to refinance the cost, or else you could sell. Unless you strike a genuine bad market the value of the property should have risen in that time.
A lot of mortgage lenders merely need to make a great investment. While your local bank could still be lacking confidence there are lots of financial lenders that would wish to make a deal. Financiers like 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. If you default they could eventually foreclose on the property and sell it, paying off the existing mortgage in the proceeds.
Now you can observe the entire picture. It is good that seller and buyer can work hand in hand. In the event they can’t wait for a sale, you could still give them their initial price with a little versatility on their part.