Dallas, Texas – “Why is it that only five in every 100 people are financially secure at age 65?” Edwin Kelly, CEO of Specialized IRA Services, took some dramatic steps toward isolating the reason for this disturbing statistic at the Think Realty National Conference & Expo in Dallas, Texas, on February 24, 2018. “The truth is, there is a lot of misinformation out there, and there are some very strong forces working against most investors’ retirement portfolios,” Kelly concluded…
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Are you thinking of investing in property? However you don’t have enough money to do so. Here 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 better guess is to locate a land that the owner has great desire for offering it, whether because they are moving, divorce, or frustration with tenants.
Actually, if you maybe currently renting and thinking of using this strategy perhaps your landlord would be glad to assist you! There are a few variations that may be used depending upon you and your seller. Do they want the market price or are they just eager to get out of the monthly payments – maybe facing foreclosure?
The easiest way is to consider taking over their mortgage payments – called ‘assuming’ the mortgage. You will need to be approved by the initial lender to presume 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 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 property with the seller. Offer a high, interest-only payment for a short time frame – 2 or 3 years. Rather than having the money sit down in a bank they could be getting a high interest over 2 or 3 years with the rest due in full at the end of the term.
When the term ends you ought to be able to refinance the cost, or perhaps you can sell. Unless you hit a real 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 lots of financial lenders that would want to make a deal. Financiers like property investing. The mortgage is mostly based on 60-70% of the value of the land, so as long as they understand 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 done with the seller. If you default they could still foreclose on the property and sell it, paying down the existing mortgage with the proceeds.
Now you can observe the entire picture. It is better that seller and buyer can work together. If they can’t wait for a sale, you could still give them their initial price with a little overall flexibility on their part.