Yes, the Seller Can Get a New Loan

Written by Tim Randle


One ofrepparttar questions I see asked over and over onrepparttar 106046 REI newsgroups is "Canrepparttar 106047 seller get another loan?" This is a great question because it so often is one ofrepparttar 106048 objections raised by a seller when a creative offer is being discussed.

The short answer is "yes". Only in rare situations would a seller not be able to qualify for another loan. This, of course, assumesrepparttar 106049 seller would typically qualify if they were not going to leave their loan behind. Let's explorerepparttar 106050 possible explanations that can be used withrepparttar 106051 seller.

Straight Rental

Ifrepparttar 106052 seller doesn't sellrepparttar 106053 house and plans to move anyway,repparttar 106054 seller will be forced to either loserepparttar 106055 property to foreclosure or leaserepparttar 106056 property out soon.

Yes, there are other solutions, but this is whatrepparttar 106057 typical motivated seller sees as their options byrepparttar 106058 time they jump onrepparttar 106059 phone and start contacting real estate investors. The above responses seem to berepparttar 106060 two most common answers torepparttar 106061 "What will you do if it doesn't sell?" question.

So, let's assume for discussion purposes that we are not involved at this point. Ifrepparttar 106062 seller finds someone to lease their property,repparttar 106063 seller's loan will still be in place. The seller may or may not have landlording experience and may or may not have a decent tenant. Those arguments come in handy for other objections, but don't really affectrepparttar 106064 "new loan" scenario.

Most lenders will giverepparttar 106065 seller a 75% income credit toward their debt ratios. For an example, assumerepparttar 106066 seller has an underlying payment of $750 and a tenant who's paying $1,000. The lender will include 75% ofrepparttar 106067 rental amount, or $750, as income which will help offsetrepparttar 106068 underlying debt payment of $750. It's not actually a "wash", but it's pretty darn close.

Even ifrepparttar 106069 rent were only $750,repparttar 106070 75% rental income credit would equate to $562.50, againstrepparttar 106071 monthly payment of $750. In my experiencerepparttar 106072 $187.50 is usually not enough to disqualifyrepparttar 106073 seller forrepparttar 106074 loan.

So, to summarize, regardless of whether you plan on acquiringrepparttar 106075 property through a lease option, Sub2, or some other form of creative financing whererepparttar 106076 existing loan stays in place,repparttar 106077 worst case scenario should be thatrepparttar 106078 new lender treatsrepparttar 106079 property as if it's a rental.

Lease Option

If you've entered into a lease option agreement withrepparttar 106080 seller, this may work favorably forrepparttar 106081 seller in qualifying for a new loan. Again, worst case should be thatrepparttar 106082 property is treated as a straight rental. Best case would be thatrepparttar 106083 lender givesrepparttar 106084 seller full credit forrepparttar 106085 debt payment.

Sometimesrepparttar 106086 lenders have different requirements to "prove"repparttar 106087 payments are actually being made byrepparttar 106088 investor. Inrepparttar 106089 past I've been asked to supply a letter confirming my agreement to be responsible forrepparttar 106090 payment. Sometimes havingrepparttar 106091 seller showrepparttar 106092 lease option agreement may be enough. Other times I've had to actually round up copies (front and back) ofrepparttar 106093 cancelled checks and mail those off.

As far as I know, I've never had a seller not receive full credit for payments that I'm making andrepparttar 106094 sellers will typically contact me when applying for a new loan. I invite them to do so when havingrepparttar 106095 initial discussion aboutrepparttar 106096 Due-on-Sale (DOS) clause andrepparttar 106097 "How do I get another loan?" concern.

What Is 'Free' Really Worth To Your Business?

Written by Elizabeth Piotrowski


Everything!

Let me explain - most of us started our own businesses for one reason - to make money! Of course, money is a good thing, but sometimes we are so focused on it that we forget there can be value in other means of exchange.

I am talking about service exchanges, barter andrepparttar like. Offering your service in exchange for another can have a profound effect on your business, as well as increase your credibility.

How?

Here's a scenario:

A visitor comes to your site, is interested in your service and contacts you with their enquiry. They tell you that they don't have a lot in their budget right now (for whatever reason), but that if you'll agree, they will give you one year's free posting at their ad site in exchange for your services.

Now, before you hit "Reply" and declinerepparttar 106045 offer, think about it - you could be throwing away literally thousands of dollars in sales by saying no!

Let's say that this person's ad site costs you $12 each time you place a 30 day 'premium' ad. That's $144 per year. Those premium members probably get listed atrepparttar 106046 top ofrepparttar 106047 page in bold text. Great exposure for you! In a nutshell, they are offering you an entire year's worth of premium advertising for just a few hours' work!

So how does this increase your credibility? That's an easy one :) By being nice enough to accept their offer in lieu of money, you have not only relieved their financial stress - you have shown them you've got heart. And believe it or not, there are still people out there who appreciate that!

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