Have you ever heard the adage, “To make money, you have to have money?” Although in many areas this is true, when it comes to real estate investing, there are… more
The post Real Estate Investing with No Money is Possible appeared first on Think Realty | A Real Estate of Mind.
To be updated with the latest in the property investing industry to may visit our property investing latest news. On the other hand in case you’re starting real estate investing and would like to start profitable real estate investing today get a copy of our profitable real estate investing ebook.
Are you contemplating investing in property? However, you do not 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 with you.
To be fair, not every seller will be willing (or even understand) the concept outlined. Your very best gamble is to find a land that the owner has great desire for offering it, whether because they are moving, divorce, or they are frustrated with the people renting the place.
Actually, if you are currently renting and thinking of using this approach perhaps your landlord would be happy to help you out! There are some variations that could be used depending upon you and your owner. Do they need the market price or are they just eager to get out from the monthly payments – perhaps facing foreclosure?
The simplest way is to take over their mortgage repayments – called ‘assuming’ the mortgage. You will need to be approved by the initial 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 remains in the seller’s name.
You take over the original mortgage and make a 2nd mortgage on the remaining cost of the property with the seller. Offer a high, interest-only payment for a short time period – two or 3 years. Instead of having the money stay in a bank they could be collecting a high interest over two or three years with the rest due in full at the end of the term.
When the term draws to a close you ought to be able to refinance the cost, or you could sell. Unless you hit an actual bad market the value of the property should have risen in that time.
Most mortgage lenders merely want to make a good investment. While your local bank may still be scared there are a lot of financial lenders that would wish to make a deal. Financiers like real estate. The mortgage is mostly around 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 kind of income you make. Complete the deal with a 2nd mortgage done with the seller. In case you default they could still foreclose on the property and sell it, paying off the existing mortgage with the proceeds.
Now you can observe the complete picture. It is better that seller and buyer can work hand in hand. If they can’t wait for a sale, you can still give them their asking price with a little overall flexibility on their part.