I’m excited to share this interview with you today. My guest is savvy entrepreneur, Julie Broad. Today we’re going to talk about marketing and branding. (My favorite topics in case you haven’t noticed). Julie is an entrepreneur at heart. She is a real estate investor, a best selling author and the owner of a […]
The post Julie Broad on Marketing and Branding – Video – Podcast #129 appeared first on Louisville Gals Real Estate Blog.
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Are you contemplating investing in property? But you do not have enough cash to do so. Here is a tip you can use as long as the person selling the property is willing to negotiate with you.
To be fair, not all sellers will be interested (or even understand) the concept outlined. Your very best guess is to locate a land that the owner has great interest in selling, whether because of moving, divorce, or frustration with tenants.
Actually, if you maybe currently renting and considering using this strategy perhaps the owner would be glad to assist you! There are a few variations that may be used depending upon you and your vendor. Do they need the market price or are they just desperate to get out from 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 first lender to assume the mortgage. If you cannot get approved for an assumable mortgage you could 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 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. Instead of having the money sit down in a bank they could be getting a high interest over two or three years with the remainder due in full at the end of the investment term.
When the term ceases you should be able to refinance the cost, or you could sell. Unless you hit 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 want to make a deal. Financiers like property investing. The mortgage is usually based on 60-70% of the value of the property, so as long as they understand they get their money back in the value of the property if you default, they don’t care what kind of money you make. Complete the deal with a second mortgage done with the seller. In case you default they can eventually foreclose on the property and sell it, paying off the existing mortgage in the proceeds.
Now you can observe the entire picture. It is good that seller and buyer may 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.