Home » Real Estate

Creative Financing Help to Get a Good Real Estate Deal

Jun 21, 2008
When it comes to real estate investing, there are plenty of reliable resources that provide some creative financing options:

* GET A SELLER'S CONCESSION. In a slow market, such as we have today, a motivated seller may readily concede a portion of the closing costs to offset the buyer's financial burden at the closing. For example, if you, as the buyer, are purchasing a property for $100K, ask for a seller's concession of 3 to 5 percent, which is within the guidelines that most banks allow, depending on the amount financed. If you ask for a 3 per cent concession, which in this case is $3,000, the seller is agreeing to receive $97,000 at closing. Once you have this agreement in place, be sure to include it in the contract.

* GET 100% FINANCING. Because of the slow market we are in today, you will find many in the lending industry tightening up their practices. However, there are still plenty of mortgage products to meet most buyers' needs. As an example, there is an 80/20 mortgage that allows for the entire cost of the property to be financed by the bank. This is especially beneficial if you do not have a down payment. Here's how it works: The primary loan (i.e. the first mortgage) represents 80% of the mortgage and the secondary loan (i.e. second mortgage) represents the remaining 20%. It's best to try to get a fixed rate on the first mortgage because more than likely you may have to pay a higher adjustable rate on the second mortgage. Go to banks who have been in business for a long time or mortgage brokers who have access to a wide number of lenders and ask them what type of mortgage products they offer. Recognize that although this will be 100% financing, you still may need to pay closing costs for the loan, so ask, at the very beginning, what fees are involved with the funding.

* FIND A PROGRAM OR ORGANIZATION. National programs abound for first time homeowners and investors also. There are programs that offer down payment assistance to first time home buyers with low to moderate income. Look up the Neighborhood Assistance Corp of America (naca.com) which offers its members counseling, low interest mortgages with no down payment or closing costs and also renovation assistance. There may be rules and restrictions, so be sure to do your due diligence before making a decision.

* USE OPM. That's right...buyers can use "other people's money" by partnering with investors, friends, colleagues and even family as well as your traditional bankers and mortgage brokers. Your agreement with your partner should specify the loan amount, the interest rate, the payback period and any other stipulations you might make. It's best to set up the proper paperwork through a real estate attorney.
About the Author
This is Emil from investing-in-property.com coming to you with this article on property investment. If you'd like to find out more please visit my website .
Rating:
Please Rate:
(Average: Not rated)
Views: 129
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Accounting
    • Credit
    • Currency Trading
    • Debt Consolidation
    • Insurance
    • Investing
    • Leasing
    • Loans
    • Mortgage
    • Mutual Funds
    • Personal Finance
    • Stock Market
    • Structured Settlements
    • Taxes
    • Wealth Building
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources