Real Estate Investing Creative Financing Sources

In a land contract the seller agrees to carry the note in other words finance the sale of the property. ( As a Real Estate Investor you will sell more houses this way and a lot quicker). The buyer makes a down payment and monthly payment according to the terms of the contract until the balance is paid in full. The seller will hold title to property until final payment. If the buyer default, the seller can evict the buyer and retain all money paid. It is important to check your state law before you enter into this contract.  Some states have laws which give a defaulted buyer more protection, and the seller must foreclose on the property to reclaim it. To prevent this there is a clause you can place in the contract if you are selling property. I put in all my Land Contract/Seller financing deals if the buyer default then this contract convert to a lease contract and all lease laws apply. It has work for me in the pass with ease.

ASSUMPTION OF EXISTING FINANCING

There are certain loan which are assumable loans without approval. FHA-insured and VA-guaranteed loans are assumable loans. For an FHA loan to be assume without approval it must have originated before December 1,1986,  and VA-guaranteed loan must have originated before March 1, 1989. Anyone can buy theses properties subject to the mortgage or assume the mortgage.

Taking property Subject-to The Mortgage:
When a property is purchase to the mortgage. The loan remains in the name of the borrower and the title goes in the name of the buyer. The original borrower remains liable for the debt, even if the buyer defaults. Most Real Estate Investor will use this method to eliminate risk and take ownership of the property. ( I HIGHLY RECOMMEND THIS METHOD). No money or credit is needed.

Assumption of the Mortgage
When a person assume a mortgage, That person become liable for the debt. Should the person default, the person is primary liable for the debt, and the original borrower is secondarily liable.