We Buy Houses *no Equity - No Problem*
I saw this sign on the side of the road today. I understand the concept of finding an older home that is run down and the seller owes little or nothing so you can buy it at a competative price. But how could an investor help someone who has no equity in their home? Doesn't make sense to me, yet someone paid for the sign so it must work. Can anyone shed light?
I like to know too,can any of you experts our gurus www.answer.newbie needs help.
Often a "no equity" property really has some equity, just not enough to pay the real estate commission for a traditional sale. For the properties with very little equity or "no" equity, the investor makes his money with his exit strategy.
Both the Subject To technique and the Lease Option technique accomplish this. As the investor in this property, you are selling the future value of the property and giving a credit challenged buyer time to repair his credit before he cashes you out with new financing.
The investor contracts to sell the property to a buyer at the future value of the property. The investor collects a small up front payment (either a down payment or option consideration) and a monthly cash flow (either rent or a spread on the interest rate) for one or two years. At a future point in time, the buyer obtains new financing for the property, cashes out the investor, and gets the deed to the property.
Did this answer your question?[ Edited by DaveT on Date 11/15/2003 ]
check the subject to forum.
however, this one is going to blow your mind.....maybe not.
If you have a car, it's worth 10K, and you owe 10K. You want to get rid of it. I offer to take over your payments which are $200 a month, meaning the loan on the car will stay in your name, and I'll just continue to make the payments and you just give it to me.
Now I go out and sell your car to my brother. I tell him to give me $1500 down and give me a monthly payment of $250. He agrees and now I'm making money.
Apply this same method to houses and the numbers go up a whole lot more.
House + No Equity = Loan Stays in your name
and a happy investor
Hi commuterguy,
These ads could also be geared to owners in preforeclosure who think they cant sell their house because they owe more than it is worth.
This situation would give Investors an opportunity to complete what is called a Short Sale. Meaning they will meet with the owner, talk with the bank and offer the bank less than the amount than is owed on the property. It happens every day in every city USA!
Best of success!
BAMZ
I always believe that in most cases:
"If you can't get price, you can get terms"
Meaning that if someone wants to get $90k for their house that is worth $92K, maybe you can do a sub2 for 10 years and give them $90k when the home is worth $115K
Quote:
On 2003-11-15 12:52, nebulousd wrote:
check the subject to forum.
however, this one is going to blow your mind.....maybe not.
If you have a car, it's worth 10K, and you owe 10K. You want to get rid of it. I offer to take over your payments which are $200 a month, meaning the loan on the car will stay in your name, and I'll just continue to make the payments and you just give it to me.
Now I go out and sell your car to my brother. I tell him to give me $1500 down and give me a monthly payment of $250. He agrees and now I'm making money.
Apply this same method to houses and the numbers go up a whole lot more.
House + No Equity = Loan Stays in your name
and a happy investor <IMG SRC="images/forum/smilies/icon_biggrin.gif">
Nebulousd, Does this mean the seller gets nothing?
not always, they sometimes get some, sometimes they don't
It all depends on the situation and if there is equity in the property
Bascially, those signs should say, "We'll TRY to buy your home" With no equity, and going into foreclosure, an investor may be able to set up a short sale on the property. So, lets say a house is worth 100k, and 98 k is owed. I would go to the bank, and offer, I dunno, 65-75k for the pay off, and prevent them from having to pay for the foreclosure, if they say yes, I just bought a house and made an instant 30% equity or better
[addsig]
Where do you get the 65 to 70K ? How does that work?
Hi JamesStreet,
You would either get set up with a short term note from a HML, and then either resell or refi them out after you take title, or you could go after Private Money!
Best of Success!
BAMZ