By: Cody THOMAS
While at the beach last week, I carefully watched the news regarding the major lenders like CountryWide and Thornburg Mortgage. Since the change in liquidity for mortgages, there's an opportunity for savvy investors.
Everyone is talking about all the bargains to be found because of the rising number of foreclosures and the excess inventory. It's true that sellers are beginning to discount price and bargains are showing up. You can expect even larger discounts within the next 12 to 24 months. But today, I want to talk about another opportunity.
The new opportunity is on the backend when you sell the property. Since all the lenders are turning off the tap, it's time you step up and offer financing to qualified buyers. Wait there more...
Don't make the mistake and think I'm talking about those with C & D credit. There are buyers with great credit scores that are getting turned down because the underwriters are drying up. In addition, the remaining lenders are asking for hefty down payments of 20%.
Attract those with great credit scores and get at least 10% down, take back a note of 80% at 7.5% or higher and then take back a second of 10% at a higher interest rate of 9%+. Of course, factor in the credit score and adjust those rates accordingly.
Buyers will become easier to find and you can upload your properties a little quicker. You will be surprised to find buyers with decent credit scores. So step up and start being the bank. More than ever is there a demand owner financing on the backend.
Because the sub-prime lenders are gone.. I mean really gone. So if you want to fund those with C & D credit, you can
find even larger pool of buyers that need financing. So while you are buying the bargains in foreclosure on the front tend develop a system to start funding your buyers to create a cash cow.
You'll end up with selling properties faster and creating some excellent returns.
Note: Be aware of the federal and state lending regulations when lending directly to consumers.
