Property Investing Via Owner Financing
The advent of the world wide web has changed the way people do everything from a personal to a professional level, including finding real estate investing information and opportunities. The purpose of this article is to guide you through the process of online property investing.
It used to be that most loans for investment property went through a bank, which required filling out applications and filing a formal business plan as well as divulging the applicant’s financial details. Now more and more sellers of investment real estate are providing owner financing to their buyers. This is a boon to buyers who have credit problems and can’t get a conventional loan from a bank. They will make the down payment and monthly payments to the previous owners of the property.
Investment property sellers are providing buyers with very attractive terms through owner financing, including low down payments, low interest rates, and no credit qualification process. Making the minimum monthly payments is all that is required to get approved.
Regardless of when, where, or how a property is purchased, the buyer should be diligent in inspecting the home before signing on the dotted line. Buyers will want to confirm they will receive a warranty deed on the property, which insures the property title is free and clear of any liens, and that the current owner has the right to sell the property.
Additionally, it’s a good idea for the prospective buyer to contact the local tax office and inquire about the most recent assessment of the investment property. This will give the buyer a good idea as to whether or not he/she is getting a bargain. If the investment property is located in another state, the buyer should request photos and even consider hiring a video professional to make a recording of the immediate area and the land for visual purposes. For larger purposes, traveling to the location for a personal inspection is recommended.
A signed contract is highly advised when purchasing investment property with owner financing. The contract simple states numerous figures of the sale including the down payment required, full purchase price, monthly payments, number of payments required until payoff, a listing of pre-payment penalties (if any), the location of the property, and the size and details of the property, this contract is signed by both parties.
A legitimate investment property contract should verify that the seller agrees to finance the property at a specific interest rate and will sell the described property after a set number of payments. In response, the purchaser consents to pay a specific amount every month on a specific day. The contract must summarize the correct location, street address, size of the lot and parcel number. It should also address stipulations concerning overdue or missed payments, late fees and cancellation alternatives (if any). The agreement should be signed and dated by both parties to be considered official.
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- Daniel Wright
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