I have a guest post for you today from Anton Ivanov of DealCheck, and today’s article is on 5 things you should check before buying your next rental property. Whether you are buying your first rental property or your next rental property, these tips will help you make choices that will positively affect your […]
The post 5 Things You Should Check Before Buying Your Next Rental Property appeared first on Louisville Gals Real Estate Blog.
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Are you thinking of investing in property? However, you do not have enough cash to accomplish this. Right 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 interested (or even understand) the concept outlined. Your very best guess is to locate a land 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 approach perhaps your landlord would be happy to assist you! There are several variations that may be used depending upon you and your owner. Do they need the market price or are they just eager to get out from the monthly payments – maybe facing foreclosure?
The easiest method is to consider taking over their mortgage repayments – called ‘assuming’ the mortgage. You will need to be approved by the initial lender to assume the mortgage. If you can’t get approved for an assumable mortgage you could 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 first 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 frame – two or three years. Instead of 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 ends you ought to be able to refinance the cost, or you could sell. Unless you struck a real bad market the value of the property should have risen by then.
Most mortgage lenders merely need to make a good investment. While your local bank may still shy away there are lots of financial lenders that would wish to make a deal. Financiers like 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 property if you default, they do not care what sort of income you make. Conclude the deal with a 2nd mortgage done with the seller. If you default they can still foreclose on the property and sell it, settling the existing mortgage with the proceeds.
Now you can observe the whole picture. It is better that seller and buyer can work together. In the event they can’t wait for a sale, you can still give them their initial price with a little overall flexibility on their part.