Posted by Sean on May 15, 1999 at 20:14:02:
Ok, if you have $50k cash that is available to be used suggest that you start by finding a bank or mortgage broker that specializes in unseasoned refinances.
Your plan is simple – to find motivated sellers (due to foreclosure, divorce, job transfer, etc.) who need to sell immediately, if not sooner. Look for houses worth around $62,500.
You then offer to buy their house & cure their problem by paying them all cash for their property and a fast close – just three days. The catch is that you are offering them 80 percent of the value of the property.
Some people will reject your offer and be offended by it; forget them. Some will counter offer and about 1 in 12 will accept. So you buy their property for 80 percent of what it’s worth.
You then turn around and refinance the property getting an 80 percent loan, effectively pulling all your cash out of the property and giving you 20 percent equity. Move a tenant in, and you should have little problem having the tenant’s loan cover expenses.
The trick is finding someone that will do unseasoned refinances, but I think there is a mortgage broker on here that does it. They will likely be drawn to the title of this post and (hopefully) email you their info.