Think Realty will hold a Conference and Expo, July 14 and 15, at the Marriott Irvine Spectrum. The real estate investing event will focus on technology and innovation, while also featuring real estate industry pros, educational breakout sessions on topics relevant to investors, panel discussions, valuable networking opportunities and the latest industry tools and resources. Tickets are $85 and include Saturday lunch.
The event will kick off on Saturday with keynote speaker, Sam Freshm…
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Are you thinking of investing in property? However you don’t have enough cash to accomplish this. Here is a tip you are able to 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 better gamble is to find a land that the owner has great desire for selling, whether because they are moving, a divorce settlement, or frustration with tenants.
Actually, if you are currently renting and thinking of using this strategy perhaps the owner would be glad to assist you! There are several variations that could be used depending upon you and your vendor. Do they desire the market price or are they just eager to get out of the monthly payments – perhaps facing foreclosure?
The easiest way is to take over their mortgage repayments – called ‘assuming’ the mortgage. You will have to be approved by the initial lender to presume the mortgage. If you can’t get approved for an assumable mortgage you may also try a ‘subject to’ assumption where you merely make payments while the property stays 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 3 years. Rather than having the money stay in a bank they could be collecting a high interest over 2 or 3 years with the rest due in full at the end of the investment term.
When the term ends you should be able to refinance the cost, or perhaps you could sell. Unless you strike an actual bad market the value of the house should have risen by then.
A lot of mortgage lenders merely want to make a great investment. While your local bank could still be scared there are plenty of financial lenders that would like to make a deal. Financiers prefare real estate. The mortgage is mostly 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 don’t care what sort of income you make. Conclude the deal with a 2nd mortgage created with the seller. If you default they could still foreclose on the property and sell it, paying off the existing mortgage in the proceeds.
Now you can see the whole picture. It is better that seller and buyer can work together. If they can’t wait for a sale, you may still give them their initial price with a little versatility on their part.