Homebuyers’ and renters’ lifestyle preferences are changing, and health-conscious amenities may add value to a property in a residential development.
According to information released at the Urban Land Institute (ULI)’s spring meeting last week, younger generations of Americans will likely live briefer lives than their parents. This is the first time in U.S. history that such a change in life-expectency has occurred. “In the U.S., our children’s generation,…
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Are you thinking of investing in real estate? However, you do not have enough money to do so. In this article is a tip you are able to use as long as the property seller is willing to negotiate along.
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 desire for offering it, whether because of moving, a divorce settlement, or they are frustrated with the folks renting the property.
Actually, if you are currently renting and thinking of using this approach perhaps your landlord would be happy to assist you! There are some variations that may be used depending upon you and your vendor. Do they desire the market price or are they just eager to get out from the monthly payments – maybe facing foreclosure?
The simplest method is to consider taking over their mortgage payments – called ‘assuming’ the mortgage. You will have to be approved by the initial lender to assume the mortgage. If you cannot get approved for an assumable mortgage you could 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 create a 2nd mortgage on the remaining cost of the property with the seller. Offer a high, interest-only payment for a short time frame – 2 or 3 years. Instead of having the money sit in a bank they could be getting a high interest over 2 or 3 years with the rest due in full at the end of the term.
When the term ends you need to be able to refinance the cost, or perhaps you could sell. Unless you hit a genuine bad market the value of the property should have risen in that time.
Most mortgage lenders merely want to make a great investment. While your local bank may still be scared there are a lot of financial lenders that would like to make a deal. Financiers prefare real estate. 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 estate if you default, they do not care what kind of money you make. Complete 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 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 asking price with a little versatility on their part.