The house rehabbing business can be a boon at times to a bust at other times. You must be able to sell your house as it becomes ready to put on the market. It does not always work out that way.
So what do we do when it turns to a bust? Most all of us in the beginning of our business, we borrow money or seek owner financing, if we are planning on doing quite a few houses we will be doing both. Owner financing is beautiful at times but we got to face it is not always available.
When it is not available we have to find financing somewhere if we are going to stay in business. This leaves one of the main options we will use as we progress along in this business.
So we turn to a mortgage broker who has a few good private lenders in his pocket. Nevertheless, the interest rate charged is always be put into a range of 16% to 20%, just very seldom for less.
There is an old saying we must go by the “Golden Rule” he who hath the Gold Rules, that is the way it is, no getting around it.
So we get the best deal we can get and if we are getting a good price on the property, the high percentage will not hurt us for a few months.
So we proceed on with the deal and do the closing then get to work on the house and get it ready to go the market as quickly as we can.
But then what happens when we get the house ready to go and within a month or so the market has turned very bland or flat.
Here we sit with a a house and a loan on it of maybe 50K at a high interest rate, say 18 percent and we do have to make monthly payments on the thing, so what do we do? If the loan is interest only we still have a payment in the neighborhood of $750.00 per month.
So now we have to do a little bit of scrambling to be able to make this payment. Sometimes because of the necessity many rehabbers has turn into landowners or lessors. So we run ads “lease purchase option” sale by owner. Some drop the price but we have an 80 thousand dollar house we owe fifty.
So we do a 12 month lease purchase option at about $1100.00 per month. We are able to get by, however I have friends who have had as many as forty houses in this same situation at one time.
We were forced into becoming landlords. It can happen so you also need to study up some on renting and the landlord deal.
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Article Source: Are You Getting Calls On Your Ad House For Sale?
