Investor Financing

Regardless of your credit scenario and or income level there are many different options available for you to invest in Real Estate. We specialize with expert investor based Mortgage Brokers who are able to help you plan your purchases with your own financial circumstances. Some of the scenarios are as follows:

  • 1. Seller Funds the Whole Deal If the seller owns a property free and clear, they can carry a mortgage for the entire purchase price of the property.
  • 2. Seller Funds Part of the Deal by Carrying a Second Mortgage In the case where the seller has a mortgage on the property, but also has some equity, the seller may be willing to help with the financing by carrying a second mortgage on the property.
  • 3. Seller Funds Part of the Deal by “Wrapping” the First Mortgage If the seller is willing to create a note and take payments for their equity, but the buyer can’t get a new first mortgage (or doesn’t want to go to the expense of getting a new first mortgage), the seller can create a new note for the entire purchase amount that “wraps” the existing first mortgage.
  • 4. Seller Takes Second and Third, Keeps Third and Sells Second In this situation, the seller wants some cash, or wants more cash than the buyer has to offer. For example, let’s say a buyer offers $200,000 for a home that has an existing $100,000 mortgage. The seller is willing to carry a second mortgage, but wants a minimum of $20,000 cash. The investor could get a new $100,000 first mortgage and then just pay the $20,000 and have the seller carry a note for $80,000.
  • 5. Seller Carries a Second Position Note with a Balloon Payment So far we have used examples where sellers were willing to carry notes that were fully amortized over the negotiated term of the loan with no balloon payments attached. But many times, sellers may be willing to carry notes, but not for 20 to 30 years. They may be willing to accept payments based on a 30-year amortization period, but they want the full balance to be paid off in a shorter period of time. This becomes another negotiating point in structuring the deal.
  • 6. Graduated Payments as an Alternative to a Balloon Suppose you buy a property to keep for a long-term rental. The seller is willing to carry a note for some or all of the equity, but wants a balloon payment down the road. You may be able to eliminate the balloon (or at least reduce the balloon payment amount) by negotiating graduated payments into the deal.

Sources of Creative Funding:

  • • Other investors

  • • Partners

  • • Hard-money lenders

  • • The property itself

  • • The seller

  • • The realtor (if one is involved)

  • • The buyer

  • • The renters (if it is an existing rental property)

  • • Options and leases

  • • Underlying mortgages

  • • Special first-time home-buyer programs

  • • Down-payment assistance programs (for those who qualify)

  • • Your rehab contractor

  • • Your local city, county, or state government (special loan programs)

  • • Government grants

  • • Private grants (for special projects)

  • • Relatives or friends

For additional information about financing or to get a pre-approval visit:

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