How to Purchase A Home Without A 20% Downpayment in Sarasota Florida

Work 9-5 every day, skip out on your morning Starbucks grande iced vanilla bean latte routine, make the smart decision to invest in your 401k and follow a budget. This is the advice that we hear every day, whether from parents, friends or from popular personal finance guru’s, about how to save up money and become rich, but unfortunately these really don’t work – unless you have 40 years to wait. Since you’ve made it here you’ve probably caught on that Real Estate is an avenue that actually does work and has the potential to give you that life you’re dreaming about while sitting at your desk. However, you’ve likely got one big problem – how do I save up that 20% down payment for an investment property in Sarasota and the renovation it is certainly going to need?? Life always has a way of bringing up unexpected expenses that get between you and that goal.

Well, fortunately, there are several ways to structure your next investment property without that elusive 20% down payment and today we are going to discuss 3 of them. Read on to hear these three methods that could be the answer you are looking for to get started on your real estate investing career and finally be able to live that life that you know you deserve.

Seller Financing

First on our list of ways of how to purchase a home without a traditional 20% down payment in Sarasota Florida is Seller Financing. In a normal transaction the buyer goes to a bank for a loan, pays a 20% down-payment and then the seller is paid the money owed to them in one lump sum. With Seller Financing the bank is removed from the equation and the Seller acts as the bank. Instead of taking a loan from the bank, you (the buyer) take over the home and pay the Seller via payments (with or without interest) over an agreed upon timeframe (this can be 1 year, 10 year, 30 years, anything!) What’s the benefit to the Seller? They are going to receive a larger amount over time when interest is factored in. Plus, they are receiving some sweet, guaranteed income (perfect for those looking to retire). Benefit for the buyer? No strict bank 20% requirement – you structure the deal how you want.

Subject To

Next up on our list of ways to get your next investment deal in Sarasota without a traditional 20% down payment is “Subject To” deals. In this scenario the buyer takes over the seller’s mortgage payments, keeping the original mortgage that the buyer had on the property – including the payment terms and length of payment. Although the mortgage is not changed, the Deed to the property does get transferred, meaning you now own this property in full and legally, with all the benefits that real estate ownership brings. Avoid the expensive fees and the loan paydown that has already happened, plus of course skip out again on that required 20% down payment with this method!

Novation Agreement

Last on our list of how to purchase your next Sarasota home without a traditional down payment is a Novation Agreement. In this scenario you must be interested in fixing and flipping a home (or wholesaling the deal to another investor). Again, instead of taking out a loan from a traditional bank or hard money lender and paying those fees and 20% down payment, the buyer partners with the seller to perform the fix and flip. A contract is signed to make this legal, but the home remains under the ownership of the Seller, with all decision rights transferred to the buyer. The buyer then performs necessary renovations (paid for by the buyer) and makes any other required payments along the way. Once the renovation is complete, the house is then finally sold to another buyer and the profit is split between you and the Seller (per agreed upon terms). This is an amazing way to team up with a Seller and avoid saving up for a 20% down payment.

At the end of the day, Real Estate investing is a creative field and one that does not require months and months of difficult saving to get a 20% down payment. With a little creativity and hard work your next purchase can be much more attainable than you expected. At Maio Strand Property Group we buy houses in Venice Florida and we utilize these strategies plus more. Contact us if you are interested in selling your home in Venice Florida or learning more about these strategies!

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