I have managed to buy 5 properties with a grand total of $568.00 out of pocket.
I spent 6 years and countless hours of study before purchasing my dream home. I am happy to tell you that by following this basic strategy you can make the process of buying real estate pure fun, but it is a large investment in your future and should be treated as such. Now I recently purchased my dream family home with no cash out of my pocket (well only $10) it is 2 story, 7 bedrooms, an office, 2 bathrooms, all for just $25,000K.
This is how to do it.
Lesson #1
This was an ‘as is’ sale,the home needed urgent structural work, but was quite liveable in the interim. If you have the ability to do this work yourself rather than uscontractors,there is a considerable profit to be made. Most importantly,this is about your financial future, so be sure to never allow yourself to become emotionally attached to the property you want.Your seller will be aware of this and you may agree to an unwise financial arrangement.
Lesson #2
Everything must be in writing,dated and signed by all parties. This documentation should then be recorded at your local county courthouse. Specify who will pay what portion of the closing fees. When signing the agreement offer $10 until any further balance of cash changes hands. This secures your first right of purchase and removes the property from the marketplace.
Lesson #3
Always make sure your seller is going to get what he or she needs from the sale. The rest will happen more easily than you realise if this is conveyed to them. A mutually beneficial arrangement can be made with any seller if they know they’re getting exactly what they have asked for.
Lesson #4
Having paid down your contract for some time, you may wish to approach a conventional loan institution for funding. If this is the case, I would advise waiting until you have paid down around 20% of the purchase price. This will allow you to negotiate a lower interest rate with the bank. You can present your payment stubs as evidence of your timely payments to date.
Also, call your utility companies and have them fax you a copy of your last 12 months payment records. The bank will be looking for these things when estabishing if you’re a good credit risk or not.
Lesson #5
If you have any credit cards, and most people do these days, try to pay those down as far as possible before approaching your bank. These cards, although handy, offer revolving credit and your expenditure will be looked at in terms of percentages when it comes to your ability to pay each month.
Any person with minimal purchasing experience can negotiate a home purchase such as this. It is mostly common sense, and by being specific with the wording of your agreement and recording the documents,you will protect yourself from possible future legal headaches.