Whether you are new to real estate investing or a seasoned investor, you are always on the lookout for the next deal. Well, in a low inventory market, how do you find your next deal? With margins thinning and costs rising, you must be able to find properties with numbers that work. I think by nature we always try and overcomplicate these processes, but there are some simple and effective ways to market for your next property. Here are my top five:
1. Use the MLS
Do your homework and fi…
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Are you contemplating investing in property? But you don’t have enough cash to do so. Right here is a tip you may use as long as the person selling the property is willing to negotiate with you.
To be fair, not every seller will be interested (or even understand) the concept outlined. Your better gamble is to find a land that the owner has great desire for selling, whether because of moving, divorce, or frustration with the folks renting the property.
Actually, if you maybe currently renting and thinking about using this technique perhaps your landlord would be glad to help you out! There are a few variations that could be used depending on you and your seller. Do they want the market price or are they just desperate to get out of the monthly payments – maybe facing foreclosure?
The simplest method is to consider taking over their mortgage obligations – called ‘assuming’ the mortgage. You will have 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 obligations while the property stays in the seller’s name.
You take over the first mortgage and get a second mortgage on the remaining cost of the house with the seller. Offer a high, interest-only payment for a short time period – 2 or three years. Rather than having the money sit down in a bank they could 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 ends you need to be able to refinance the cost, or you could sell. Unless you strike a real bad market the value of the property should have risen in that time.
A lot of mortgage lenders merely need to make a good investment. While your local bank could still be scared there are a lot of financial lenders that would want to make a deal. Financiers like real estate. The mortgage is mostly 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. Complete the deal with a 2nd mortgage created with the seller. In case you default they can still foreclose on the property and sell it, settling the existing mortgage in the proceeds.
Now you can observe the complete picture. It is better that seller and buyer can work hand in hand. If they can’t wait for a sale, you could still give them their initial price with a little versatility on their part.