Why Low Priced Houses In Rural And Urban Areas Are Cash Cows

Source: http://joecrumpblog.com/why-low-priced-houses-in-rural-and-urban-areas-are-cash-cows/

 

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To be up to date with the latest information in the real estate industry to can check out our property investing latest news. On the other hand if you are new to real estate investing and desire to begin profitable real estate investing today download a copy of our profitable real estate investing ebook.

Are you contemplating investing in property? However you do not have enough money to accomplish this. Right here is a tip you can 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 very best guess is to locate a property that the owner has great interest in selling, whether because of moving, divorce, or frustration with the people renting the place.

Actually, if you are currently renting and thinking of using this strategy perhaps the owner would be happy to assist you! There are a few variations that could be used depending upon you and your vendor. Do they need the market price or are they just desperate 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 need to be approved by the original lender to assume the mortgage. If you can’t get approved for an assumable mortgage you may as well try a ‘subject to’ assumption where you merely make obligations while the property remains in the seller’s name.

You take over the first mortgage and get a 2nd mortgage on the remaining cost of the property with the seller. Offer a high, interest-only payment for a short time period – two or 3 years. Instead of having the money sit in a bank they can be collecting a high interest over two or three years with the rest due in full at the end of the investment term.

When the term ceases you should be able to refinance the cost, or you can sell. Unless you strike a real bad market the value of the home should have risen by then.

A lot of mortgage lenders merely want to make a good investment. While your local bank may still be lacking confidence there are a lot of financial lenders that would like to make a deal. Financiers prefare property investing. The mortgage is usually around 60-70% of the value of the property, so as long as they know they get their money back in the value of the property if you default, they don’t care what kind of money you make. Complete the deal with a 2nd mortgage done with the seller. If you default they can eventually foreclose on the property and sell it, paying off the existing mortgage with the proceeds.

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

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