Real Estate Investing Profits Ep 7 Mike Cuevas Real Estate Marketing Dude with System in Chicago

Source: http://youtu.be/NIUVypSD3zA

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Are you thinking of investing in property? However you do not have enough cash to do so. Right here is a tip you can 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 best gamble is to find a property that the owner has great desire for offering it, whether because they are moving, a divorce settlement, or they are frustrated with the people renting the place.

Actually, if you maybe currently renting and thinking of using this approach perhaps the owner would be happy to help you out! There are several variations that may be used depending on you and your seller. Do they need the market price or are they just eager to get out of the monthly payments – perhaps facing foreclosure?

The simplest way is to take over their mortgage payments – called ‘assuming’ the mortgage. You will need to be approved by the first lender to assume the mortgage. If you can’t get approved for an assumable mortgage you could as well 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 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 3 years. Instead of having the money stay 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 can sell. Unless you struck a genuine 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 may still shy away there are plenty 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 understand they get their money back in the value of the estate if you default, they do not care what kind of money you make. Conclude the deal with a 2nd mortgage created with the seller. In case you default they can still 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 can work together. In the event that they can’t wait for a sale, you could still give them their initial price with a little versatility on their part.

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