Linda Liberatore, challenge-seeker, mother, teacher, and founder and president of Secure Pay One Inc., is the newest addition to the coaching staff at Think Realty. “I’m so passionate about helping… more
The post Think Realty Welcomes Linda Liberatore to Coaching Program appeared first on Think Realty | A Real Estate of Mind.
To be updated with the latest information in the real estate industry to can check out our property investing latest news. On the other hand if you’re new to real estate investing and would like to start profitable real estate investing now download 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 can use as long as the person selling the property is willing to negotiate along.
To be fair, not every seller will be interested (or even understand) the concept outlined. Your very best wager is to find a property that the owner has great desire for selling, whether because of moving, divorce, or they are frustrated with the people renting the place.
Actually, if you are currently renting and thinking about using this strategy perhaps your landlord would be glad to help you out! There are some variations that can be used depending upon you and your vendor. Do they desire the market price or are they just desperate to get out of the monthly payments – perhaps facing foreclosure?
The easiest method is to consider taking over their mortgage repayments – 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 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 second mortgage on the remaining cost of the property with the seller. Offer a high, interest-only payment for a short time period – 2 or three years. Rather than having the money stay in a bank they could 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 ends you should be able to refinance the cost, or you could sell. Unless you hit a real 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 shy away there are a lot of financial lenders that would want to make a deal. Financiers like real estate. 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 estate if you default, they do not care what kind of income you make. Conclude the deal with a 2nd mortgage created with the seller. In case you default they could still foreclose on the property and sell it, paying down the existing mortgage in the proceeds.
Now you can see the complete picture. It is good that seller and buyer can work together. In the event they can’t wait for a sale, you may still give them their initial price with a little overall flexibility on their part.