Best Loan for Real Estate Investors

Source: http://youtu.be/jwXNmu8tZUM

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Are you thinking of investing in real estate? However, you don’t have enough money to do this. Here is a tip you can use as long as the person selling the property is willing to negotiate along.

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

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

The easiest method is to take over their mortgage obligations – 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 repayments 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 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 investment term.

When the term draws to a close you need to be able to refinance the cost, or you can sell. Unless you struck a real 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 may still be lacking confidence there are a lot of financial lenders that would want to make a deal. Financiers prefare property investing. The mortgage is usually around 60-70% of the value of the land, so as long as they know they get their money back in the value of the property if you default, they don’t care what sort of revenue you make. Complete the deal with a second mortgage done 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 complete picture. It is better that seller and buyer may work hand in hand. In the event that they can’t wait for a sale, you may still give them their initial price with a little overall flexibility on their part.

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