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Investors Are Sellers

By: Kane Thomas

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Investing in single-family houses in San Diego these days is to a certain extent a bit different than it’s been within some while.

In the old days, investors were content to pay lofty prices and to support monthly negative cash flow because they felt compellingly that prices were going to climb far faster than the negative cash flow would grind down their money.

In the result of the suprime meltdown, those days are not anything other than a faint memory.

Today’s knowledgeable investor comprehends that if a property doesn’t produce a positive cash flow every month; together with a return on the cash down payment, there is certainly not much point in owning the house.

The explanation for this is that most of the investors I chat with don’t trust that prices are going to go up any time soon….and why would they? The unemployment rate is roughly 15%, the global economy is in recession, California is bankrupt, the frightening pile of foreclosures is huge, and the volume of mortgage debt that is due for an interest rate reset in the subsequent 24 months is more than what we saw throughout the sub-prime misfortune, and the majority of these properties will almost certainly end up in foreclosure as well.

Glowing picture, isn’t it?

Now, with that being said, prospect still exists for those quick enough to set out and look for it.

For example, think about the investor that bought rental properties 20 or so years before.

Chances are, their houses are paid off and today’s market price is well above what they paid so many years in the past. What has happened for the period of that time? The investor has gotten older and the house is possibly in need of work.

As investors get older and richer, they are less likely to want to continue to be caught up in managing and fixing houses. Their time has become their most valuable asset and they already have sufficient money to meet their needs. The grouping of these two things makes them suitable as a possible seller.

The key is to put together a arrangement that involves seller financing. By doing so, the selling investor can continue to receive the monthly revenue to which they have grown used to and they get to relieve themselves of the irritation of supervising the house. From a tax perspective, instead of being faced with a stiff tax statement when they sell, the selling investor can now stretch the tax bill over the duration of time they are in receipt of proceeds from the buying investor.

For the buying investor, the agreement is similarly gripping. Rather than having to go to a pretender lender (an institution), the buyer can collaborate directly with another human being. This results in a deal that usually involves only a small down payment, a practical interest rate, and heaps of flexibility down the road.

The end result of a contract like this sees both investors better off than they were previously, but for very unique personal explanations.

Article Source: http://depositarticles.com/

Trent Dyrsmid is a professional real estate investor, based out of San Diego, California. His company, Kalomar Properties, has many tools and techniques available to help both buyers and sellers accomplish their financial goals. Get more information about San Diego investment property.

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