How To Work With Contractors So You Don’t Get Screwed

Source: http://joecrumpblog.com/how-to-work-with-contractors-so-you-dont-get-screwed/

 

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To stay updated with the latest information in the real estate industry to may visit our property investing latest news. On the other hand if you are beginning real estate investing and would like to begin profitable real estate investing now download a copy of our profitable real estate investing ebook.

Are you contemplating investing in real estate? But you don’t have enough money to do this. Here is a tip you are able to use as long as the person selling the property is willing to negotiate along.

To be fair, not all sellers will be interested (or even understand) the concept outlined. Your better wager is to locate a property that the owner has great interest in offering it, whether because of moving, divorce, or frustration with the people renting the place.

Actually, if you maybe currently renting and thinking about using this technique perhaps the owner would be glad to assist you! There are some variations that can be used depending on you and your seller. Do they need the market price or are they just eager to get out from the monthly payments – maybe facing foreclosure?

The simplest way is to consider taking over their mortgage repayments – called ‘assuming’ the mortgage. You will need to be approved by the original lender to presume the mortgage. If you cannot get approved for an assumable mortgage you could also try a ‘subject to’ assumption where you merely make obligations while the property remains in the seller’s name.

You take over the first 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 three years. Instead of having the money sit in a bank they could be getting 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 should be able to refinance the cost, or else you could sell. Unless you hit a real bad market the value of the property should have risen by then.

Most mortgage lenders merely want to make a good investment. While your local bank could still be lacking confidence there are plenty of financial lenders that would like to make a deal. Financiers like property investing. The mortgage is mostly based on 60-70% of the value of the property, 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 second mortgage done with the seller. If you default they could eventually foreclose on the property and sell it, settling the existing mortgage with the proceeds.

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

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