The Many Futures of Urban Living

Source: http://astudentoftherealestategame.com/the-many-futures-of-urban-living/

It’s no secret that most young professionals today prefer a 24/7 live/work/play environment. More than ever, talent is clustering in dense, urban areas. However, as jobs and people have moved back into cities in droves, urban housing has become too …

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Are you thinking of investing in real estate? But you don’t have enough money to do this. Here is a tip you can 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 guess is to locate a land that the owner has great interest in offering it, whether because they are moving, divorce, or frustration with tenants.

Actually, if you maybe currently renting and thinking of using this technique perhaps the owner would be happy to assist you! There are several variations that could 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 – perhaps facing foreclosure?

The simplest way is to take over their mortgage payments – called ‘assuming’ the mortgage. You will need to be approved by the original 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 obligations while the property remains in the seller’s name.

You take over the original mortgage and get 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 three years. Instead of having the money sit in a bank they could be collecting a high interest over 2 or 3 years with the rest due in full at the end of the investment term.

When the term draws to a close you ought to be able to refinance the cost, or you can sell. Unless you hit a genuine bad market the value of the home should have risen by then.

Most mortgage lenders merely need to make a good investment. While your local bank could still be lacking confidence there are lots of financial lenders that would wish to make a deal. Financiers prefare property investing. The mortgage is usually based on 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 don’t care what kind of revenue you make. Conclude the deal with a 2nd mortgage created with the seller. If you default they can eventually foreclose on the property and sell it, settling the existing mortgage with the proceeds.

Now you can see the entire picture. It is good that seller and buyer can work together. In the event that they can’t wait for a sale, you can still give them their asking price with a little overall flexibility on their part.

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