When you think of three-dimensional (3D) modeling in terms of home design, you probably think of high-end, luxury interior designers and their software. However, 3D modeling can be extremely useful for real estate investors as well as owner-occupants upgrading their homes. Think Realty Magazine talked to Mark Reginelli, director of world trade at Think Realty benefits provider 84 Lumber, about the benefits real estate investors can derive from using this design tool.
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Are you contemplating investing in property? However, you don’t have enough money to do this. In this article is a tip you can use as long as the person selling the property is willing to negotiate along.
To be fair, not all sellers will be willing (or even understand) the concept outlined. Your best wager is to find a land that the owner has great interest in offering it, whether because of moving, divorce, or frustration with the folks renting the property.
Actually, if you are currently renting and considering using this technique perhaps the owner would be happy to assist you! There are some variations that could be used depending upon you and your owner. Do they want the market price or are they just desperate to get out from the monthly payments – perhaps facing foreclosure?
The simplest way is to consider taking over their mortgage payments – called ‘assuming’ the mortgage. You will need to be approved by the first lender to assume the mortgage. If you can’t get approved for an assumable mortgage you may also try a ‘subject to’ assumption where you merely make obligations while the property stays in the seller’s name.
You take over the original mortgage and get 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 3 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 term.
When the term ceases you need to be able to refinance the cost, or else you can sell. Unless you hit an actual bad market the value of the house should have risen by then.
A lot of mortgage lenders merely want to make a great investment. While your local bank could still be lacking confidence there are a lot of financial lenders that would wish to make a deal. Financiers prefare 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 second 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 observe the complete picture. It is better that seller and buyer can work together. In the event they can’t wait for a sale, you may still give them their asking price with a little overall flexibility on their part.