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Are you thinking of investing in real estate? However you don’t have enough money to do so. In this article is a tip you are able to use as long as the property seller is willing to negotiate with you.

To be fair, not every seller will be willing (or even understand) the concept outlined. Your best gamble is to find a property that the owner has great desire for selling, whether because they are moving, divorce, or they are frustrated with tenants.

Actually, if you are currently renting and thinking about using this strategy perhaps the owner would be happy to help you out! There are a few variations that may be used depending on you and your seller. Do they need the market price or are they just eager to get out of the monthly payments – maybe facing foreclosure?

The easiest method is to consider taking over their mortgage obligations – called ‘assuming’ the mortgage. You will need to be approved by the original lender to assume 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 stays in the seller’s name.

You take over the first 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 – two or 3 years. Instead of having the money sit in a bank they could 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 ends you ought to be able to refinance the cost, or you can sell. Unless you struck a genuine bad market the value of the property should have risen in that time.

A lot of mortgage lenders merely want to make a good investment. While your local bank may still be lacking confidence there are plenty of financial lenders that would wish 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 understand they get their money back in the value of the property if you default, they don’t care what kind of income 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, paying off the existing mortgage in the proceeds.

Now you can observe the entire picture. It is good that seller and buyer can work together. In the event that they can’t wait for a sale, you may still give them their asking price with a little overall flexibility on their part.

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