BEST WAY TO GET STARTED IN REAL ESTATE
Here are a couple of ideas that should help you get started in the right direction and answer how you can do a no money down deal with no cash, no credit, no income, no nothing, except having some general knowledge backed with a desire to succeed by going out there and taking ACTION!!!
The way most people make money in this game is by using creative techniques to solve one person’s problem while being able to structure the deal to where it makes you a profit.
The key to finding a lot of deals in this game is to look for the MOTIVATED SELLERS…. forget about looking for houses, that’s a waste of time and requires way too much work!!! Narrow it down to dealing with “MOTIVATED SELLERS” and make fewer offers that result in getting more offers accepted!
Let me give you an example on buying a house for full market value, with no money out of your pocket, picking up a quick $5k up front, some positive cash flow every month, and a nice payday on the back end…. plus where talking about dealing in NICE homes with this strategy….NO junk properties!
Mr. Seller has a newer home he purchased about 2 years ago. When he purchased the home he put about 5% down and was able to qualify for 95% financing. After closing cost he had hardly any equity left. Mr. Seller ended up buying a new home a couple years later. He’s been trying to sell this home before he has to close on his new home. He can’t even afford to list the home with a realtor because he doesn’t have enough equity in the property to even cover the 6% – 7% commission he would have to pay a real estate agent.
Now the Seller’s new home is finished, ready to be moved into and he needs to close on it. He closes and figures he’ll sell the old home soon, but soon enough doesn’t seem to be coming. Now the Seller is starting to have some financial problems because he has to start paying two mortgage payments until someone buys the old home. The Seller has a problem now because he can’t afford to make two mortgage payments. If something doesn’t give pretty quickly, he’s going to fall behind on the payments on the old home. He’s going to pay the new homes mortgage first. But he doesn’t want to be late or get behind on the payments of the old home either. The Seller is worried about damaging his credit if he misses any payments.
This is where I would come along and be in a position to SOLVE HIS PROBLEM! I can put a stop to the Seller’s worry and stop the bleeding TODAY! All the Seller needs to do is agree to my TERMS and I’ll even pay him what he owes on the property, which is pretty close to full market value. The Seller knows he wasn’t going to get any money out of it after paying off his mortgage and closing costs, so all the Seller wants and all he NEEDS is to get out from under his mortgage payment!
I agree to take over the Seller’s mortgage. I take it over “subject to”, which means I assume the Seller’s loan without even qualifying through the lender that holds the Seller’s mortgage. The Seller will deed the property over to me. I now OWN the home. The Seller is still on the loan that has the lien against the property. The Seller remains responsible to the lender for that loan until I pay it off! Usually within a few years when my tenant ends up exercising their option that I will give to them under a lease option agreement. I won’t be liable for the loan on the property to the lender. The Seller’s bank can’t come after me if something where to go wrong. The loan is in the Seller’s name, not mine! However, I will be liable to the Seller to perform on our contract agreement to make his payments and pay off that loan eventually, but my liability is to Seller, not his bank.
The Seller deeds the property over to me. The house is worth $150k. The Seller’s loan balance is about $145k. I agree to start making the payments in 30 – 60 days from today! Now I have 30 – 60 days to market the property before my payments start. The payments are $1400 PITI
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