If you are thinking of taking the plunge and investing in the Hawaii real estate market, you can rest assured it is a very wise thought you are having there… actually many people dream of investing in the real estate but to many people, that remains nothing but a dream seeing as it is many people are turned off by the hefty down payment they are supposed to place beforehand. You don’t need to get discouraged though as there is a way you can do it without actually putting up any down payment.
The secret lies in finding that property in which the owner is so much interested in selling it, perhaps because they want to move houses urgently, perhaps because of an impending divorce proceedings or because of frustrations with the current tenants and stuff. There are several variations you can use depending on how you and the seller agree. Find out if the seller wants to sell at the market price or perhaps they are facing foreclosure and want to get assistance with the monthly payments.
The simplest and most straight forward way here is to assume the mortgage payments – taking over their monthly payments because clearly they cannot afford to do it. To be on the safe side, it is advisable you go to the original lender so you get approved and things are done officially that you have assumed the mortgage loan in question. Some lenders though can complicate the process of approving one for an assumable mortgage, which in this case you can go with a ‘subject to’ assumption in which you will be working on mutual agreement with the seller. This way, you will be making the mortgage payments but the property will remain under the official names of the seller.
When you assume the original mortgage and seek mortgage refinancing on the remaining cost of the property in question with the seller. After that, you can play a significantly higher interest-only payment for a significantly short period of time say 2-3 years. By the time the loan comes to maturity after the 2-3 years, you would have collected a significant amount from the high interest rather than simply having the cash sit in the bank for the same period of time.
Once the term of the loan comes to an end, you can then be able to sell the property or refinance your cost. It goes without saying that unless the real estate market is real bad at the time of selling it; the value of the said property would have risen significantly. Most lenders today want to make a great investment since the real estate market is such a lucrative one. So if you find that your local bank is a little coy, you can rest assured there are very many financial institutions out there who would love to close a deal with anyone interested in investing in the real estate market.
