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All Cash<\/span><\/strong> is pretty straight forward.\u00a0 The buyer brings a large briefcase of cash to the seller and the deed is transfered.\u00a0 This is the most straightforward way to buy a home, but it puts much of the risk into buyers lap.\u00a0 Why not all of it?\u00a0 Because the seller now has traded his\/her appreciating asset into a deflationary asset called cash.\u00a0 That cash is losing 11% the instant it’s received in the seller’s hands. Most people mistakenly think that all cash is the best term, but ultimately this is limited thinking.\u00a0 Since it’s 100% unleveraged , there must be a reason to risk all of that cash into this one asset, aka, a good low price.\u00a0 So does this benefit the seller?\u00a0 Usually it does not, unless there is some major motivation like a financial hardship or desperate circumstances.\u00a0 If the seller is willing to take 50-60 cents on the dollar then they usually have a very good reason to accept that low offer.<\/P><\/p>\n There are 5 ways to finance a house All Cash OPM Lease Option Subject 2 Terms from Seller All Cash is pretty straight forward.\u00a0 The buyer brings a large briefcase of cash to the seller and the deed is transfered.\u00a0 This is the most straightforward way to buy a home, but it puts much […]<\/p>\n","protected":false},"author":1,"featured_media":331,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pagelayer_contact_templates":[],"_pagelayer_content":"","footnotes":""},"categories":[21,28,29,32,22,23,19,24,36,1],"tags":[],"class_list":["post-327","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","category-coaching","category-deal-structuring","category-landlording","category-opm","category-real-estate-investing","category-sub2","category-subject2","category-tax-benefits","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/327","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/comments?post=327"}],"version-history":[{"count":9,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/327\/revisions"}],"predecessor-version":[{"id":339,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/327\/revisions\/339"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/media\/331"}],"wp:attachment":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/media?parent=327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/categories?post=327"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/tags?post=327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nOPM<\/strong><\/span> or using a bank or private lender is a very popular technique and it’s how most people invest in real estate.\u00a0 Using a bank loan for some percentage of the purchase price, utilizes leverage which is one of the key benefits to real estate.\u00a0 In other words, you don’t have to put all cash into a property, you can use leverage (of a bank loan) and maybe only put down 10-20%.\u00a0 \u00a0One of the hidden downsides of using a bank are the fees and closing costs.\u00a0 Sometimes this can be very expensive.\u00a0 One transaction I heard recently was charging 15% transaction cost, on a $200k property, it was close to $30k just for the bankers fee.\u00a0 Ouch.<\/P><\/p>\n
\nBuying on a Lease Option<\/strong><\/span> is a great way to acquire a home and one of my favorites.\u00a0 In this method you as the buyer, are also playing the role as tenant.\u00a0 You then use your master-lease and sublet to your tenant.\u00a0 You don’t have to sell on a lease option, but with the purchase of a lease option you gain control of the home and lock in a future purchase price.\u00a0 It’s really a great technique for the right situation, and a great solution for the seller.<\/P><\/p>\n
\nBuying Subject 2<\/strong> is a great way to get into a home without qualifying for a loan.\u00a0 This is short for buying Subject to the existing financing.\u00a0 \u00a0There are nuances to this technique that will be explained in future articles.\u00a0 Keeping this technique in your back pocket for the right circumstance will make you a lot of money, and give the seller a real solution at the right time.<\/P><\/p>\n
\nWorking out terms with the seller, sometimes called a Purchase Money Loan<\/strong><\/span>, is a great way to find a win-win with both seller and buyer.\u00a0 The buyer acquires a home usually for small initial investment and the seller often times gets the price their seeking and sometimes a premium on the home. It’s a great alternative for both parties.\u00a0 There are also tax benefits for the seller if they’re facing depreciation recapture or capital gains.<\/P><\/p>\n
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