Today’s first order of business for Stephen Rosenberg, CEO of commercial real estate lending, investment, and advisory firm Greystone & Co., is simple, but it may catch the uninitiated by surprise. It is not, for example, allocating the approximately $30 billion in assets that his company manages, nor is it coordinating a high-profile meeting between the executives who lead his 34-odd company offices and some 8,000 employees. It is not even (although this is a close second on the list) …
To stay updated with the latest information in the real estate industry to may visit our real estate latest news. On the other hand if you are starting real estate investing and desire to start profitable property investing now download a copy of our profitable real estate investing ebook.
Are you thinking of investing in property? However you don’t have enough cash to accomplish this. Right here is a tip you can use as long as the property seller is willing to negotiate along.
To be fair, not all sellers will be interested (or even understand) the concept outlined. Your best guess is to locate a property that the owner has great desire for selling, whether because they are moving, a divorce settlement, or they are frustrated with the folks renting the property.
Actually, if you are currently renting and considering using this technique perhaps your landlord would be happy to help you out! There are a few variations that could be used depending upon you and your seller. Do they need the market price or are they just desperate to get out from the monthly payments – maybe facing foreclosure?
The easiest way is to take over their mortgage repayments – called ‘assuming’ the mortgage. You will have 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 payments while the property remains in the seller’s name.
You take over the first mortgage and create a 2nd mortgage on the remaining cost of the house with the seller. Offer a high, interest-only payment for a short time frame – two or three years. Rather than having the money sit in a bank they can be collecting a high interest over two or three years with the remainder due in full at the end of the investment term.
When the term ceases you need to be able to refinance the cost, or else you could sell. Unless you hit 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 good investment. While your local bank could still be scared there are plenty of financial lenders that would like to make a deal. Financiers prefare property investing. The mortgage is mostly 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 estate if you default, they do not care what sort of income you make. Complete the deal with a second mortgage created 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 observe the complete picture. It is good that seller and buyer can work hand in hand. In the event that they can’t wait for a sale, you may still give them their asking price with a little versatility on their part.