There are many methods to real estate investing. There are also, quite literally, tens of thousands of different ways to structure a deal or even approach a new real estate opportunity The bottom line is that no investor can really understand every little situation and discrepancy, and real estate investment is not necessarily the golden nugget of money making that it is often perceived to be.
Ways to invest in real estate includes bank-owned foreclosure auctions, short term flips, and owner financing. These are all considered creative ways for real estate investors to make some money. As a matter of fact, traditional real estate investing is considered safe, and many investor's stay away from creative deals. The real money is in thinking outside the box and structuring deals with some legitimate creativity, known as Creative Real Estate Investing.
Below is a broad overview of some of the more daring and non-traditional methods for crafting a new investment opportunity. These are often deals many investors will stay away from, because they do not know how to handle it. But the best approach is to be well-versed and knowledgable.
Foreclosure Creative Real Estate Investing
A pre-foreclosure is a property that may be a few months away from being dumped into the banks ownership. This is a great opportunity for an investor, but time is the main consideration. Structuring pre-foreclosure deals can be difficult because the bank is always present (and they are not necessarily known for their creativity or outside the box dealings).
In this type of situation, it could be wise to do a subject-to agreement. It essentially works as follows. The loan owned on the property stays in the seller’s name. The title of ownership is transferred to the buyer and/or investor. The new owner will pay for the property accordingly as they go about fixing it up, getting a tenant, or whatever other purpose they have for buying the home.
Short Term or Long Term Investing
This is a short term answer to make money with real estate. For one, sellers are not necessarily interested in keeping their name on the loan. The whole purpose of selling the home was to remove the debt. But for a period of typically two to six months, this could be a brilliant way to substantiate financing without worrying about taking on the full loan right away. In other words, it is a glorified stalling strategy.
Working Around a Down Payment
When buying a property, a down payment is generally mandatory. This strategy actually circumvents the need for a down payment because the buyer is paying the property debt immediately. This is a clever way to get around the troubling down payment and learn creative ways to make money. This strategy also allows time for the buyer to get their financing settled.
As far as the bank goes, the title or deed of the home was transferred. Their need to sell the property was established, and the debt is still being paid. Generally, banks are open to this idea. But always get the deal reviewed by a professional attorney because specifics may vary by state.
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