Can you buy real estate investments without actually having to assume the loans? Yes you can. It is not that complicated and is a huge time saver for both the seller and the investor.
I read in a book a while back that this can be called subject to financing. There are a few advantages to buying investment property this way.
One, you get the tax benefits of owning the property. There are several deductions at your disposal with this method.
Two, you don’t have to worry about all the costs involved with getting a brand new loan from a bank. There will be no worry about loan application fees or escrow.
Three, you won’t be responsible to the bank. Your credit will not be at risk here. Just be sure and make payments on time so that the seller does not get into any trouble. That would be bad for business.
Four, no worries about qualifying for a loan. This one is a favorite. The loan already exists so you don’t have to worry about going through the process of finding a lender to give you the money. Plus you don’t have to worry if your credit is less than stellar. This one is a huge time saver.
This method of real estate investing is great for all the above reasons, plus you get to get creative again. There are many reasons that a home owner wants to get out of their loan. They could be in a tight spot financially and are getting behind. They could have gotten a promotion and they need to move quickly. These reasons are prime candidates for the existing financing strategy.
All you do as the investor is send the bank a check each month instead of the actual owner. You don’t actually assume the loan. You are on the title to the property but the mortgage comes first. I have wondered myself, is this actually a legitimate way to buy an investment property? The answer is yes it is!
