Now the rest of the criteria are similar as in the Retail Exit above a Does the

Now the rest of the criteria are similar as in the

This preview shows page 102 - 104 out of 121 pages.

Now, the rest of the criteria are similar as in the Retail Exit above : a) Does the property have at least 20% in equity, so I can buy it at 80% of the FMV (including the reinstatement and repairs)? b) If yes to a), can I get the seller to agree that I will not make payments unless I find a buyer; or do I have funds to make the payments; or can I use my buyer’s down payment to reinstate the loan? As you can conclude from those questions, if the reinstatement is less than 10% of the FMV, you stand a good chance to cover it with the down payment you will get from your Owner Financing buyer, plus some. If the reinstatement is less than 5%, then you may even cover it with the down payment from a Lease Option buyer. In both cases, it would be a NO MONEY REQUIRED deal for you. If you’re using private money for reinstatement, then 100% of your buyer’s down payment is your up-front profit. You will still have some cash flow, and a big back-end payday when your buyer refinances you down the road.
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Foreclosure Investing MASTERY - Manual – SECTION 1 . Copyright 2017 – 2018 © Marko Rubel Page 103 of 121 NOTE: even if you got Yes to all of the above criteria, there is one circumstance where the Owner Financing will not be a valuable exit strategy. Do you know which one? It is when the interest rate on the loan you are taking over is too high, causing the payments to be high and therefore very hard to quickly find a buyer who can cover them. à You should follow the same criteria I teach my coaching students, and that is, if the Interest Rate on the underlying loan is higher than (On Going Market Interest Rate + 1.5%) do not plan on Owner Financing, and sell Retail. The reason is that it’s fairly easy to find buyers who will pay 2 – 3% higher than market Interest Rates for the non-qualifying financing. So, if your financing is +1.5%, you still have plenty of Cash Flow left for you. 4. RENT IT OUT EXIT – the questions you need to ask is… Is there enough equity after repairs and reinstatement so I can buy it at satisfactory discount? And, can I afford to leave the funds invested in the deal for a long time? You should buy the property at least at 80% of the FMV minus repairs, and thus not hope on appreciation to make your profit. Due to hassles and risk involved with having rentals, I don’t suggest you have any rental properties until you have made at least $200k in quick turn profits investing in Real Estate. If you want to keep properties, you should use Lease Options and Owner Financing as exit strategies (more about Lease Options you will learn in Manual #4). As you can see, this business is possible to do without having any money to start , except some for education and marketing. However, you will be able to buy more deals if you have access to some money. So, cultivating private lenders should be your goal.
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  • Spring '15
  • Mr. Gardner
  • Subprime mortgage crisis, short sale, Hard money lender, Hard money loan

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