Those new to real estate investing often fail to take action because they don't have much cash. The truth is that
very best investors got their start when they had little or no money.When you start at bottom you have to work harder and smarter. You have to make every penny count... and in doing so you learn how to put together most profitable deals.
Right now one of very best ways for newbies to get started is to buy property buy taking over payments of an existing loan. It's called buying "subject to".
You generate income to make mortgage payments by quickly leasing property. Lease payments pay make mortgage payments.
Here's something most investors overlook when buying "sub to" and why they lose around $1,000 each time they do a deal. We often buy properties "subject to" underlying mortgage. That simply means we give motivated seller a little money (if he is really motivated no cash is needed) and take over payments of loan that's already in place.
We have title, but seller's name stays on mortgage loan.
This a popular way of buying property from motivated sellers. It allows investor to buy many properties with very little cash. It also places a severe responsibility on investor to stay current with mortgage payments. You must be a good landlord and some rent payments rolling in.
Here's where most investors fail to pick up that one thousand dollar that is just waiting to be claimed.
When investor sells that property they often are not aware that they can get a check from original lender for cash that has accumulated in loan's impound account.
That is money collected monthly by lender to pay taxes and insurance. It often adds up to around a grand or more and it's easy to get if you know what you're doing.
When you buy a property "subject to" underlying mortgage, always get all owners of property to sign a Limited Power of Attorney giving you control of anything having to do with house in future. That way you don't need their cooperation later, when they've left area and can't found.
