An elite team of Think Realty investors, experts, and executives will travel to China next week for the Global Destination Investment Summit, an event co-hosted by Think Realty. Shanghai is… more
The post Think Realty Co-hosts Global Real Estate Summit in Shanghai appeared first on Think Realty | A Real Estate of Mind.
To stay updated with the latest in the real estate industry to may check out our property investing latest news. On the other hand in case you’re new to real estate investing and desire to begin profitable property investing today download a copy of our profitable real estate investing ebook.
Are you thinking of investing in real estate? But you don’t have enough cash to do so. Here is a tip you can use as long as the property seller is willing to negotiate with you.
To be fair, not all sellers will be interested (or even understand) the concept outlined. Your best guess is to find a property that the owner has great interest in selling, whether because of moving, divorce, or they are frustrated with tenants.
Actually, if you maybe currently renting and thinking of using this technique perhaps your landlord would be glad to help you out! There are a few variations that could be used depending on you and your vendor. Do they desire the market price or are they just desperate to get out of the monthly payments – maybe facing foreclosure?
The easiest way is to take over their mortgage obligations – 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 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 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 frame – 2 or three years. Rather than having the money sit down in a bank they could be collecting a high interest over 2 or 3 years with the rest due in full at the end of the term.
When the term ends you need to be able to refinance the cost, or you can sell. Unless you hit a real bad market the value of the property should have risen by then.
Most mortgage lenders merely want to make a great investment. While your local bank may still shy away there are a lot of financial lenders that would want to make a deal. Financiers prefare property investing. The mortgage is mostly 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 revenue you make. Conclude the deal with a 2nd mortgage done with the seller. If 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 better that seller and buyer can work together. If they can’t wait for a sale, you can still give them their asking price with a little versatility on their part.