Let the “everything’s bigger in Texas” jokes begin. Ben Caballero will laugh all the way to the bank. Caballero, who already held the world record for selling $1.444 billion worth of homes in 2016, topped that record in 2017 with $1.906 billion in home sales.
Caballero sold 3,556 homes in 2016 and 4,799 homes in 2017. He is a real estate professional with HomesUSA in Addison, Texas and real estate’s first Guinness World Record Holder. He is also the top-ranked real estate profe…
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Are you thinking of investing in real estate? However you don’t have enough money to do so. In this article is a tip you may use as long as the property seller is willing to negotiate with you.
To be fair, not all sellers will be interested (or even understand) the concept outlined. Your very best gamble is to locate a property that the owner has great interest in selling, whether because they are moving, divorce, or they are frustrated with the folks renting the property.
Actually, if you are currently renting and thinking of using this technique perhaps the owner would be happy to assist you! There are several variations that may be used depending upon you and your vendor. Do they need the market price or are they just eager to get out of the monthly payments – maybe facing foreclosure?
The simplest method is to take 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 remains in the seller’s name.
You take over the original 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 frame – two or three years. Rather than having the money stay 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 ought to be able to refinance the cost, or perhaps you can sell. Unless you struck an actual bad market the value of the property should have risen by then.
Most mortgage lenders merely want to make a great investment. While your local bank could still be scared there are lots of financial lenders that would want to make a deal. Financiers prefare 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 land if you default, they do not care what kind of money you make. Complete the deal with a second mortgage created with the seller. If you default they can still foreclose on the property and sell it, settling the existing mortgage with the proceeds.
Now you can observe the whole picture. It is good that seller and buyer can work hand in hand. If they can’t wait for a sale, you can still give them their asking price with a little overall flexibility on their part.