Hi! I am Reginald Esteban, President of Patriot Development LLC. We are a real estate investment company based in Washington, DC. We also do business in South Eastern Virginia.
Do you want to purchase homes with little or no money down? Do you want to buy properties without having to qualify for a loan with the bank? Well, this video cast is for you.
The objective of this mini course it to provide an overview of how some real estate investors purchase homes subject to an existing mortgage. This is a strategy used by investors to purchase homes with little or no money down to closing. This is also used to help increase an investors cash wealth.
So how can I find these types of deals? A real estate investor may buy the home owner who is highly motivated to sell, and he is willing to sell the property significantly under market value. An example of this scenario is when a home owner is facing bankruptcy, and has little or no equity enable. There are times when a seller is motivated enough to sell the home for less than the current market value.
This could mean that the home owner does have equity but is willing to lower the price enough so that he doesn't get the maximum amount of equity in the home. The strategy does not apply to homes that are having negative amount of equity. An appropriate strategy, one way to do it would be using short sales. We will not cover that in this actual video, this will be at a later date.
In this scenario, the home owner and the real estate investor go through the appropriate closing attorney and sign the contract to sell the home to the real estate investor. The real estate investor agrees to make the monthly payments on existing mortgage, in return for selling for the seller transferring the deed to the real estate investor.
The existing mortgage is not assumed under the name of the real estate investor, it's very important. The mortgage is kept in the seller's name. This scenario is known as a subject to approaches. This means that the buyer purchase the home subject to the terms of the existing mortgage.
Since the real estate investor in now responsible for making the mortgage payments, one strategy is to have a renter ready for the property immediately after closing. When they qualify adventures in the property, the real estate investor relies on the income from the venture to make the mortgage payments. The risk to the real estate investors that the venturer may not make payments, and the investor will still be responsible for making payments.
What are some of the possible benefits of purchasing a home subject to? Well, the real estate investor may find a scenario in which he or she does not have to put down the substantial amount to catch the purchase of home, and does not have to seek financing from a mortgage lender to pay for the balance of the existing mortgage.
He or she is required to pay for the existing mortgage months to month, for example, in the 30 year fixed scenario. Since the loan is not assumed by the buyer who is the real estate investor, and the real estate investor does not have to qualify for the loan with the bank. Buyer still can gain the benefit of tax right on some interest payments, because he or she is making the mortgage payments. The payment information is held and filed by the real estate investor.
So how can I market my services to find these deals? Successful real estate investors spend a substantial amount of time finding motivated sellers. Some common ways to try and find motivated sellers are as follows: purchasing mailing lists and sending sales copy to home owners, purchasing ads in local newspapers, posting signs sighs in neighborhoods such as we do by houses.
So remember, working with other people is key to getting what you want in business. Be ready to interact with people, keep a smile on your face. So in closing, I hope this was helpful to you so that you could have an understanding of how to make money in real estate with little or little cash on hand.
This video is brought to you by www.patriotsbuyhouses.com. Sign up now and get a offer on your house in three days. That's right, three days. Thank you very much and have a great day.
Transcription by:
Scribe4you Transcription Services