hen I first heard about The most common reason someone
people lending money to would want to do this is the case
facilitate people buying of a retired person who has held
their properties, I was puzzled the property as an investment for
and asked just that question. I a long time.
thought people were selling
because they needed money and As a real estate investor should
wanted the proceeds from the sale know, there are taxes to be paid
of the property. But then I was on the gains from the sale of
looking at it only from my narrow real estate. In the case of a
perspective. person who has had an investment
property for a long time, they
There is a way of acquiring real may not want to send the taxman
estate that can be done with 30% of their gain. By financing
little or no money down and even the buyer, they are foregoing the
if you have bad credit. That lump sum cash out for the short
method is known as "seller term and gaining a steady monthly
financing" or "seller carry" or payment for a longer term. By
sometimes in ads as "owner will spreading out the gains, they
carry". When I saw that last one spread out their taxes.
I thought - how could they carry
me? They don't know if I'm heavy There is also the case where
or not! Ok, sorry for that. someone has a property that has
been very hard to sell. Maybe
There are many possible reasons they just can't find a
why someone would want to lend conventional buyer. By offering
you money to buy their property, financing, they are marketing to
and of course for the reasons another whole set of potential
mentioned above you may want to buyers. Yes, of course, there is
seek this kind of financing out. a higher risk of default in this
case, but what is the worst that
could happen to them...they get The other common method of
their property back through finding them is to look for
foreclosure and they keep the properties that have sat on the
money the buyer already paid! Not market for a long time and see if
that bad of an outcome for them! the sellers are wiling to
consider it. Many sellers of
There are also possibilities troubled properties may have had
where because of a divorce or no idea that it was even possible
something, the seller can't for them to carry financing -
accept a large lump sum at one after all, they're not a bank!
time, or someone will be out for
a big part of it. Maybe someone It is actually very simple to
wants to secure an income for make this happen. Talk to a
their heirs and they don't want realtor or preferably a title
them to get a big chunk at once. company and they should have no
There are an infinite number of problem directing you to the
possibilities. proper way to do it. It is done
all the time and you can even
So you ask - Where can I go about consider having the seller carry
gettin' me one o' dem properties? back a second mortgage for the
The first place is to look for remainder of the sale price. This
the phrases I mentioned above. can allow you to go in with
Ads in the papers may have "OWC" little down. Some lenders may
in there to save space. Those have a problem with that, but you
sellers are saying they are should not have a difficult time
willing to finance. You should finding one who will do it. Happy
also check "for sale by owner" or hunting!
FSBO ads, they may be willing to
carry.
About the Author:
Ron LeBlanc is a real estate investor who is also a licensed engineer and Realtor. He lives with his family in Boulder Colorado - the best place on earth to live. He enjoys helping others realize their dream of financial independence. Visit him at http://www.boulder-realestate-investors.com
Source: www.isnare.com
