After the Academy Awards announced the movie “Three Billboards Outside Ebbing, Missouri,” as an Oscar contender, the real estate market saw an increase in viewership – just not the market you might expect. According to the National Association of Realtors (NAR), visitors to Realtor.com spent a fair amount of time researching both Ebbing, Missouri, and Sylva, North Carolina, where the movie was filmed.
As it turns out, Ebbing, Missouri, is a fictitious town. When site visitors loo…
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Are you contemplating investing in real estate? However you do not have enough money to do this. Here is a tip you can use as long as the person selling the property is willing to negotiate with you.
To be fair, not every seller will be willing (or even understand) the concept outlined. Your best guess is to find a property that the owner has great desire for offering it, whether because they are moving, divorce, or they are frustrated with tenants.
Actually, if you are currently renting and thinking about using this technique perhaps your landlord would be happy to help you out! There are a few 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 – perhaps facing foreclosure?
The simplest way is to take over their mortgage repayments – called ‘assuming’ the mortgage. You will need to be approved by the initial lender to assume the mortgage. If you cannot get approved for an assumable mortgage you may also try a ‘subject to’ assumption where you merely make repayments while the property stays in the seller’s name.
You take over the original 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 frame – 2 or three years. Rather than having the money sit down in a bank they can be collecting a high interest over two or three years with the rest due in full at the end of the investment term.
When the term ceases you should be able to refinance the cost, or you could sell. Unless you struck an actual bad market the value of the house should have risen in that time.
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 like to make a deal. Financiers like property investing. 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 property if you default, they do not care what sort of income you make. Conclude the deal with a 2nd mortgage created with the seller. If you default they could still foreclose on the property and sell it, paying off the existing mortgage with the proceeds.
Now you can see the complete picture. It is better that seller and buyer may work together. If they can’t wait for a sale, you can still give them their asking price with a little versatility on their part.