There are two different types of sellers: one who is in pain and one who wants gain. We work with both of these types of sellers. Every situation is different and so we can arrange our business plan around each different sellers situation. From falling behind one your mortgage/home payments, needing to move quickly, having tenants from hell, to just not needing or wanting the property anymore, we can arrange a deal that leaves both parties with a win.
For an example, let's say you're falling behind on your mortgage and you just want out of the house. We can pay you cash and pay off your existing mortgage and get you some money in your pocket as well. But that is not always what you the seller may want. Cash offers are usually lower than the market rate and for people who have distressed homes and need out of the home quickly. Maybe you don't need a large chunk of cash right now and you want market value for your home. This is where most investors fall short, they don't have any other tool in their tool box besides cash.
In a situation like this we would do what we call a "Subject to" deal. A deal subject to the existing mortgage. With this, we can get you the price you want if you give us the terms we need. let's say you have 90K left on your mortgage and about 110K in equity and the home would be worth 200K on the market. But you want that full 200k and don't want to pay the average cost of 11% (22K in this situation) to sell your home on the market.
What we would do is take over your existing mortgage: so we would be making the monthly payments of your mortgage in YOUR name. Why? Because we don't want to have to go get a loan from a bank just to pay off a loan from your bank! That would be stupid right? The only ones making money in that situation is the bank! What do you get from this? Your credit score would stay in good standing and would improve as we are paying the payments in your name and you wont be penalized for defaulting.
Now you may be wondering how you know we wont stop making the payments... quick answer you don't. It is security that you are going to trust us. But what happens if let's say i get abducted by aliens? We put a deed of trust or performance deed stating that if we miss ONE payment then you get the house back. so you get to keep our down payment, any improvements we made to the house, and the previous payments that we made. Then you can turn around and sell that home to another buyer, essentially double dipping the property!
Once the 90k mortgage is payed off we then start making payments towards your existing equity; mailbox money baby! You now are getting chunks of money in the mail that you get to keep!
We can structure these terms however as long as it makes sense and that we arent losing any money in the deal. So lets say we are renting out this home for 2,500 a month and are paying 500$ in utilities and taxes, then we can pay you that remaining 2,000! As long as we are breaking even each month and not losing money we dont care if we dont make any. Why? Becaue we can use the property as a tax write off against all of our other proerties.
This is one of many ways to ensure that both parties have a win! If you have any questions please dont hesitate to call or email me.
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