Real Estate Investing, Creative Financing Options, Upstate SC

Becoming a Real Estate Investor in today’s market is a great idea with great potential to work the deals with limited out of pocket cash. Homeowners that have had their home on the market for extended periods of time are looking for alternatives. This is where your best opportunities can be found. There is a lot of work that has to go into finding the best deals based upon the motivation of the homeowner. In most cases you want to find a home that is and has been vacant for quite awhile.  Once you have identified the potential property a detailed interview with the homeowner will assist you in determining how creative they may be. If the home is listed with a Realtor, you can still have your interview questions answered by having your agent write up the interview questions in an addendum to present to the listing agent and get the homeowners response. Here are the basics of what you may want to ask in order to get the best deal with the least amount of money out of pocket.

1. Qualifying the Home : In this step you must be sure the home is within your Primary Criteria of a home you will buy. If working directly with the owner you need to find out, year built, condition of the home, has there been any insurance claims, any cracks in the foundation, any water leaks or any other major issues. This will give you an idea on repairs prior to spending your time touring the home and working up the offer.

2. Qualify the homeowner: There are two steps in this process the first is if they have the means to sell the property under terms that will work for you and second, what is their motivation.

A. Means: How long have you owned the home, what was the purchase price, is there a mortgage balance and how much is that, are you the sole owner of the home (this is a big one) and ask if there are any liens on the home.

B. Motivation: Why are you selling the home? How quickly do you want to sell? Is anyone living in the home? Are the payments up to date? These answers will give you a much better idea on their motivation and give you the opportunity to work up an offer that can work for you and the homeowner.

Once you have Qualified the Home and the Homeowner, it is time to start the contract negotiations to get your Creative Financing in place. Options on these are many so we will cover just a couple here. Keep in mind your main objective at this point is to control the home so the owner is not looking for other people to buy the home. That being said a great first step is:

Offering an Option to Purchase for a specified period of time and a specified price, usually a minimum of one year. An effective strategy is to also add automatic extensions of one year with a minimal cash outlay at anniversary dates.

Rental option: This can give you control of the home for a specified period of time, be sure your contract for the rental includes your ability to sub lease the home and market the home. You will also want to include a buy out option at a specified price. This way you can market the home as a sale and the only expense you have is a rental deposit and monthly payment. If you choose this option, have the lease period for 6 months with an automatic extension for 6 months. This gives you the ability to walk away in a short period of time if the home doesn’t sell or rent.

These are a few ways you can begin your Real Estate Investment Portfolio with Minimum out of pocket cash. Hope this helps some. If you have questions feel free to drop me a line at agentdadams@gmail.com or give me a call at 864-201-3960. Thanks

Greenville SC Real Estate