Despite tight housing inventories and tough competition, more and more people are jumping into real estate as registered realtors. According to the National Association of Realtors (NAR)’s 2018 member Profile, just about one in three realtors has two years’ worth of experience or fewer and the realtor population has grown 6% this year.
Although realtors tend to be middle-aged, with a median age of 54 (up from 53 in 2017 and 2016), NAR chief economist Lawrence Yun noted that the p…
To stay up to date with the latest in the property investing industry to can visit our real estate latest news. On the other hand in case you are starting real estate investing and would like to begin profitable real estate investing now download a copy of our profitable real estate investing ebook.
Are you thinking of investing in property? However you do not have enough cash to do so. Here is a tip you may use as long as the property seller is willing to negotiate along.
To be fair, not every seller will be interested (or even understand) the concept outlined. Your very best guess is to find a property that the owner has great desire for selling, whether because of moving, a divorce settlement, or frustration with the folks renting the property.
Actually, if you are currently renting and thinking about using this strategy perhaps the owner would be glad to assist you! There are some variations that can be used depending upon you and your owner. Do they want the market price or are they just desperate to get out from the monthly payments – perhaps facing foreclosure?
The easiest method is to take over their mortgage obligations – called ‘assuming’ the mortgage. You will need to be approved by the initial lender to presume 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 original 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. Instead of having the money sit in a bank they can be collecting a high interest over 2 or 3 years with the remainder due in full at the end of the term.
When the term ceases you ought to be able to refinance the cost, or perhaps you could sell. Unless you struck a genuine bad market the value of the home should have risen by then.
Most mortgage lenders merely want to make a good investment. While your local bank could still shy away there are plenty of financial lenders that would wish to make a deal. Financiers prefare real estate. The mortgage is usually around 60-70% of the value of the land, so as long as they understand they get their money back in the value of the land if you default, they do not care what sort of income you make. Conclude the deal with a 2nd mortgage created with the seller. In case you default they could still foreclose on the property and sell it, paying off the existing mortgage in the proceeds.
Now you can observe the complete picture. It is good that seller and buyer may work together. In the event they can’t wait for a sale, you could still give them their initial price with a little versatility on their part.