Design and the Bottom Line

Source: https://thinkrealty.com/design-bottom-line/

While investors traditionally are encouraged to remain inside a fairly unremarkable “box” when it comes to design decisions, Ken and Anita like to push the limits in their remodeling designs. “Historically, investors stay neutral because you do not know what a buyer will really like in a house. You use the same materials over and over because they are safe. Buyers know that now, though, and we find that we are nearly always rewarded with a higher dollar amount when Anita goes…

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Are you contemplating investing in real estate? However, you do not have enough money to accomplish this. In this article is a tip you are able to use as long as the person selling the property is willing to negotiate with you.

To be fair, not all sellers will be willing (or even understand) the concept outlined. Your best gamble is to find a property that the owner has great interest in offering it, whether because of moving, a divorce settlement, or they are frustrated with the people renting the place.

Actually, if you maybe currently renting and considering using this technique perhaps the owner would be happy to assist you! There are several variations that can 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 – perhaps facing foreclosure?

The easiest way is to take over their mortgage payments – 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 could 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 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 down in a bank they can be getting a high interest over 2 or 3 years with the rest due in full at the end of the term.

When the term draws to a close you need to be able to refinance the cost, or perhaps you could sell. Unless you struck an actual bad market the value of the property should have risen in that time.

A lot of mortgage lenders merely want to make a great investment. While your local bank could still be lacking confidence there are a lot of financial lenders that would want to make a deal. Financiers prefare property investing. The mortgage is usually based on 60-70% of the value of the property, so as long as they understand they get their money back in the value of the property if you default, they do not care what kind of revenue you make. Complete the deal with a second mortgage done with the seller. If you default they could eventually foreclose on the property and sell it, paying down the existing mortgage in the proceeds.

Now you can observe the whole picture. It is good that seller and buyer can work together. If they can’t wait for a sale, you could still give them their initial price with a little overall flexibility on their part.

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