Let me explain. By picking up a house for Free I mean we bought a house with no money down and no mortgage liability. It is in Sullivan County, NY. It appraised at $240,000 in May of 2005! I know, a quarter of a million dollar house in New York, for free? Dont believe me? (See http://MotivatedSellersOnline.com/PL37182) Here is how we did it and you can too! The trick is to find someone with a pressing personal and/or financial problem that can be solved by getting rid of their property, a motivated seller, in other words. Example? I once picked up a house in Coral Gables, Florida, from a man who needed to get rid of it as soon as possible as it was keeping him from relocating to Phoenix, Arizona to be near his mother whose health was rapidly deteriorating. He had his house under contract 3 months earlier, but his buyer did not qualify for the mortgage and the deal fell through. He frantically tried to sell the house, lowering the price twice, but could not come down any further because he had refinanced the house to help his mother pay for her treatment. He felt trapped by his house. Fortunately, he saw our ad on the Internet and contacted us. We arranged to take over the payments on his $175,000 mortgage. He wasnt concerned with the $18,000 equity; he realized that by the time he finished lowering the price to get a sale, he would have lost most of what was left to realtor and closing costs anyway. The key was that we were able to act quickly without having to get a mortgage. He gladly turned the deed over to me for no money. The mortgage stayed in his name. We turned around and the next month took a $5,500 finder's fee from a new buyer who was able to refinance the mortgage and got most of his money back! In the New York deal, a young woman with two children realized that she could not afford to keep her house a year after it was awarded to her in her divorce. She had struggled valiantly for that year, unfortunately going through most of her savings to pay the $1,800 per month mortgage, including taxes and insurance on top of all her other bills. It was just too much. She tried to sell the house, but the broker told her that to be able to sell at the Fair Market Value of $260,000, would probably take at least 60-90 days, as the market was slowing. She desperately did not want to squander another 5 grand or more of her savings as her oldest girl was already in high school and would need the money for college. She saw our ad and contacted us. Her mortgage was only $205,000, but she wanted out, quickly, even more than she wanted to try to save her equity, although we told her we would give her some money when we sold. We took over the house, as you saw; a 4 bedroom, 2 bath farm house with a 1 bed, 1 bath studio and garage. It is near skiing, Hunter Mountain and White Lake, a wonderful summer resort. We are currently negotiating a deal that should give us $20-$25,000 cash, from which we will give the former owner $5,000. We will then generate about $200/Mo positive cash flow by bumping up the rate on the owners mortgage for a few years until the new owner refinances on a lease/purchase. Why would he pay a higher interest rate, you ask? Because he is getting in with no bank qualifying! He is a Motivated Buyer! So, you see it can be done. How can you do it? Run ads saying that you will take over someone's house payments. When they contact you, sign a contract with them to buy the house if you like it. Keep it or find someone to buy your contract for a finders fee. If you plan to keep it or sell on a lease purchase, you must put the house in a land trust to allow the sale. Check with your lawyer. With the slowdown in housing appreciation and the impending blowup of payment on millions of interest only mortgages over the next few years, there should be more than enough of these trapped homeowners needing help for everyone! |
