My guest today is Jim Huntzicker of Yellow Star Properties, and the topic of today’s show is how to find deals on the MLS. I’ve really been looking forward to sharing this show with you. Jim is an investor and as well as an agent. He is also the creator of a program called MLS […]
The post How to Find Deals on the MLS – Expert Interview with Jim Huntzicker – Podcast #98 appeared first on Louisville Gals Real Estate Blog.
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Are you contemplating investing in property? However you do not have enough money 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 willing (or even understand) the concept outlined. Your better wager is to find a property that the owner has great desire for selling, whether because they are moving, a divorce settlement, or they are frustrated with the folks renting the property.
Actually, if you maybe currently renting and considering using this strategy perhaps your landlord would be glad to help you out! There are a few variations that could be used depending upon you and your seller. Do they desire the market price or are they just desperate 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 could as well try a ‘subject to’ assumption where you merely make repayments while the property remains in the seller’s name.
You take over the original mortgage and get a second mortgage on the remaining cost of the property with the seller. Offer a high, interest-only payment for a short time frame – two or three years. Instead of having the money sit down in a bank they can be getting 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 need to be able to refinance the cost, or you could sell. Unless you struck 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 lots of financial lenders that would wish 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 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 second mortgage created with the seller. If you default they can eventually foreclose on the property and sell it, paying down the existing mortgage with the proceeds.
Now you can see the whole picture. It is good that seller and buyer may work together. In the event they can’t wait for a sale, you may still give them their asking price with a little overall flexibility on their part.