Dallas, Texas – “Texas is a redeemable tax deed state, and that is the best structure of any state. I’m not just saying that because I’m here in Texas!” began Arnie Abramson, founder of Texas Tax Sales Resource Group in his educational session on Saturday, February 24, 2018, at the Think Realty National Conference & Expo in Dallas, Texas. Abramson started buying tax sale properties in 1992 and used the portfolio he built to become a buyer, seller, landlord, and teacher/speaker o…
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Are you thinking of investing in property? But you do not have enough money to accomplish this. Here is a tip you may 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 better gamble is to find a land that the owner has great desire for selling, whether because they are moving, divorce, or frustration with the folks renting the property.
Actually, if you are currently renting and thinking about using this technique perhaps your landlord would be glad to assist you! There are several variations that can be used depending on you and your owner. Do they desire 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 repayments – called ‘assuming’ the mortgage. You will have to be approved by the initial lender to presume the mortgage. If you cannot get approved for an assumable mortgage you may also try a ‘subject to’ assumption where you merely make obligations while the property remains in the seller’s name.
You take over the original mortgage and create a second mortgage on the remaining cost of the property with the seller. Offer a high, interest-only payment for a short time period – two or 3 years. Rather than having the money sit down 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 ceases you need to be able to refinance the cost, or perhaps you can sell. Unless you strike 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 be scared there are lots of financial lenders that would wish to make a deal. Financiers like property investing. The mortgage is mostly 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 don’t care what sort of revenue you make. Conclude the deal with a second mortgage done with the seller. In case you default they can still foreclose on the property and sell it, paying off the existing mortgage in the proceeds.
Now you can observe the entire 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 overall flexibility on their part.