So you have decided that you want to start investing in real estate, investment purposes or maybe buying your first home, but you just do not have the cash to get you started. You might be surprised that buying real estate is possible even if you have little or no money for the down payment.
Below are a few techniques provided from Charleston SC luxury real estate professionals at GoPremierOne.com , provided the seller is willing to negotiate and has a genuine interest in selling the property as soon as possible.
The simplest method for real estate investment is to take over their mortgage payments. This is called assuming the mortgage. Naturally, you will need to be approved by the original lender to assume the mortgage. If you cannot be approved for this type of mortgage, you might want to try an assumption mortgage, this simply means that you’ll make all the monthly mortgage payments while the property still remains in the name of the seller.
What if the seller asks more than what the balance is on the mortgage?
If the seller wants a higher price than what is owed on the mortgage, you can still assume the mortgage and then get a second mortgage with the seller for the remaining cost of the house. Offer the seller a high interest-only payment for a short period, for example two or three years.
At the end of the term on the second mortgage, you should be able to refinance the property and pay off the seller. Unless there has been a downward trend in real estate, your real estate investment should have gained value in a few years.
There is no mortgage to assume-then what?
A majority of mortgage lenders want to make a good investment. While your local bank may still shy away there are plenty of financial lenders that would love to make a deal and finance your loan.
Finance companies like real estate. To get a better understanding of the process here, you have to know going in that the mortgage is going to be based on approximately 70% of the value of that property, so as long as they know they will get their money back in the value of the property if you default. Complete the deal with a second mortgage created with the seller.
As you can see, there are many different ways that you can invest in real estate as long as the buyer and seller work together. Communication is more important than money, especially if you have a motivated seller who is willing to take a chance on you.