Dallas, Texas – One of the best ways to generate solid lead generation for your real estate investing business is to get out “in the field” and talk to sellers directly. Especially in highly competitive real estate markets like Dallas-Fort Worth (DFW), which recently hosted the Think Realty National Conference & Expo on February 24-25, 2018, an investor willing to speak directly with sellers and deal with them sympathetically as well as with the “bottom line” in mind may beat th…
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Are you thinking of investing in real estate? However, you don’t have enough money to do so. Right here is a tip you may use as long as the person selling the property is willing to negotiate with you.
To be fair, not every seller will be interested (or even understand) the concept outlined. Your better guess is to find a property that the owner has great interest in offering it, whether because of moving, a divorce settlement, or they are frustrated with the people renting the place.
Actually, if you are currently renting and thinking of using this approach 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 simplest way is to take over their mortgage obligations – 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 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 create a 2nd mortgage on the remaining cost of the house with the seller. Offer a high, interest-only payment for a short time frame – two or 3 years. Rather than having the money stay in a bank they could 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 ends you should be able to refinance the cost, or else you can sell. Unless you strike an actual bad market the value of the property should have risen in that time.
Most mortgage lenders merely want to make a good investment. While your local bank could still be scared there are a lot of financial lenders that would want to make a deal. Financiers like property investing. The mortgage is usually around 60-70% of the value of the property, 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 done with the seller. In case you default they can still foreclose on the property and sell it, paying down the existing mortgage in the proceeds.
Now you can observe the complete picture. It is better that seller and buyer may work together. In the event they can’t wait for a sale, you can still give them their initial price with a little versatility on their part.