Where Have You Been, Phil?

Source: http://youtu.be/FdHpJGQe7MA

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Are you thinking of investing in property? However you do not have enough money to do so. In this article 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 gamble is to find a property that the owner has great desire for selling, whether because they are moving, divorce, or frustration with tenants.

Actually, if you maybe currently renting and thinking about using this technique perhaps the owner would be glad to assist you! There are a few variations that could be used depending upon you and your owner. Do they want the market price or are they just eager to get out of the monthly payments – maybe facing foreclosure?

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

You take over the original mortgage and make a second mortgage on the remaining cost of the house with the seller. Offer a high, interest-only payment for a short time period – two or 3 years. Rather than having the money sit in a bank they can be getting a high interest over 2 or 3 years with the remainder due in full at the end of the term.

When the term draws to a close you should be able to refinance the cost, or you can sell. Unless you strike an actual bad market the value of the home should have risen in that time.

A lot of mortgage lenders merely want to make a great investment. While your local bank may still be lacking confidence there are lots of financial lenders that would wish to make a deal. Financiers like real estate. The mortgage is usually around 60-70% of the value of the land, 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 sort of revenue you make. Conclude the deal with a second mortgage created with the seller. If you default they can still foreclose on the property and sell it, paying down the existing mortgage in the proceeds.

Now you can observe the complete picture. It is good that seller and buyer can work hand in hand. In the event 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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