Today’s show is part 3. in this series on probate investing, and the topic today is marketing to probates. In part 1. we did an overview of probate investing. In part 2. we talked about the terminology of probate. When it comes to marketing, it’s important to understand the process, the best direct mail piece […]
The post Marketing to Probates – Podcast Episode #109 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 this. In this article is a tip you may use as long as the person selling the property is willing to negotiate along.
To be fair, not every seller will be willing (or even understand) the concept outlined. Your best gamble is to locate a property that the owner has great desire for offering it, whether because of moving, divorce, or frustration with the folks renting the property.
Actually, if you are currently renting and thinking about using this technique perhaps your landlord would be glad to assist you! There are some variations that may be used depending upon you and your owner. Do they want the market price or are they just desperate to get out from the monthly payments – maybe facing foreclosure?
The easiest way is to consider taking over their mortgage obligations – called ‘assuming’ the mortgage. You will have to be approved by the first lender to assume the mortgage. If you can’t get approved for an assumable mortgage you may also 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 property with the seller. Offer a high, interest-only payment for a short time period – two or three years. Rather than having the money sit in a bank they can be getting a high interest over 2 or 3 years with the remainder 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 perhaps you can sell. Unless you struck a genuine bad market the value of the home should have risen by then.
Most mortgage lenders merely want to make a good investment. While your local bank could still be scared there are lots of financial lenders that would wish to make a deal. Financiers prefare real estate. 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 land if you default, they don’t care what kind of money you make. Conclude the deal with a 2nd mortgage done with the seller. If you default they could still foreclose on the property and sell it, paying off the existing mortgage in the proceeds.
Now you can observe the complete picture. It is good that seller and buyer can work hand in hand. In the event that they can’t wait for a sale, you can still give them their asking price with a little versatility on their part.