Seller Financing in 2008
Being that the mortgage market is in a frenzy and mortgage products are disappearing like Houdini, home buyers and real estate investors are looking for other ways to get financing on properties. I mean you can still get FHA financing, but what if you are an investor and/ or have an FHA loan already?
This article will explain an alternative to using bank financing for real estate investors. I will explain how to use seller’s financing in the current real estate market.
Seller’s financing is when a seller is willing to take back a note on a house. It can be in the form of a second mortgage, or it can be the entire note. The seller is usually more flexible if he or she has a descent amount of equity in the property.
Seller’s financing is beneficial for both the buyer and the seller. It offers great tax benefits for the seller and it offers financing for people with bad credit, no credit, and no money. So how do you use seller’s financing in order to buy real estate with no money down? Let me give you an example:
Let’s say that you call a seller on a property. After viewing the property you would like to make an offer on the house. You ask the seller if he or she is willing to do owner’s financing on the property. The seller says yes. You and the seller agree to a purchase price of $100,000. The seller is willing to hold the entire mortgage of $100,000 at a 7% interest rate. The seller also gives you a 3 year balloon payment which means that the loan will be due 3 years from the closing of the transaction.
You give the seller an earnest money deposit of $1000 and your monthly payment is around $700. You take full responsibility of the property and you must pay the taxes and keep the property in good condition. You have the benefits of owning a property and the seller has the benefits of collecting income without the responsibility of owning a property.
This type of deal is a win-win for both parties involved in the transaction. Below is a list of some of the benefits of using seller’s financing in your real estate deals:
Seller’s Benefits
-Seller can sell the property
-Seller gets to collect monthly income
-Seller doesn’t have to worry about repairing the property
-Seller gets great tax benefits
Investor’s Benefits
-You get to take ownership of the property
- You have more leverage
-You can flip the property if you buy it cheap enough or rent it for a monthly profit
I have a great mini course that you may want to check out. It provides more information on using lease purchases in this real estate market. It shows you how to use lease purchases to flip houses. It’s free information on buying real estate with No Money Down. Just go to http://www.freezerodownsecrets.com
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Jamel Gibbs own one of the fastest growing real estate investment businesses in Pennsylvania. He’s originally from Brooklyn New York. He became a real estate agent at the tender age of 21 years old and a broker shortly after. Jamel started buying real estate when he moved to Pa and he now has a successful investment business. He also coaches others who are interest in making massive profits in real estate.
