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Are you thinking of investing in real estate? But you don’t have enough money to accomplish this. 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 better guess is to locate a property that the owner has great desire for offering it, whether because they are moving, a divorce settlement, or frustration with the folks renting the property.

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

The simplest way is to consider taking over their mortgage payments – 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 repayments while the property remains in the seller’s name.

You take over the first mortgage and create a second mortgage on the remaining cost of the property with the seller. Offer a high, interest-only payment for a short time period – two or three 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 draws to a close you should be able to refinance the cost, or perhaps you could sell. Unless you hit a genuine bad market the value of the home should have risen by then.

A lot of mortgage lenders merely need to make a great investment. While your local bank may still be lacking confidence there are a lot of financial lenders that would wish to make a deal. Financiers like 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 don’t care what sort of money you make. Conclude the deal with a second mortgage done with the seller. In case you default they can eventually foreclose on the property and sell it, settling the existing mortgage with the proceeds.

Now you can see the entire picture. It is good that seller and buyer may work hand in hand. In the event that they can’t wait for a sale, you can still give them their asking price with a little versatility on their part.

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