The new tax credit extension is a great opportunity for real estate investors because land contracts are eligible (as always), and because now people that have recently owned a home are also eligible.
Why is this important? Because it allows homebuyers & real estate investors a potential “back door” for doing zero down transactions!
Let’s take a look at how such a deal would look:
Let’s assume you have someone that wants to rent one of your properties because they have no money for a down payment or that would like to buy, but has no down payment.
You get them interested in one of your properties.
Have them speak to a mortgage expert to be sure they qualify for a loan. You may also need to bring in a credit repair expert to evaluate their credit. When can it be cleaned up enough to be eligible for a mortgage?
If the mortgage & credit experts give you the green light, sell them your property on a land contract for a price you know the property will appraise for.
Take whatever security deposit money & funds they have as a land contract down payment.
Walk them through the process of filling out the tax credit documents and send them to the IRS.
Wait until their check from the IRS comes in to be used for their down payment.
Have them refinance the land contract with your mortgage expert to pay you off.
Now this is a very simplified overview of the process and there are a lot of issues that need to be thoroughly investigated at each step:
Do they qualify for the tax credit?
Do they have any tax liens?
How can you be sure they’ll give the tax credit to you?
Will they follow through on any required credit repair?
Etc, etc, etc…
Most of these issues can be overcome. If they can’t, there are plenty of other buyers out there looking for homes.
Look up the details of the new options on the tax credit extension or consult with an expert familiar with it.
Investors – Take Advantage of the Tax Credit Extension!
The new tax credit extension is a great opportunity for real estate investors because land contracts are eligible (as always), and because now people that have recently owned a home are also eligible.
Why is this important? Because it allows homebuyers & real estate investors a potential “back door” for doing zero down transactions!
Let’s take a look at how such a deal would look:
Now this is a very simplified overview of the process and there are a lot of issues that need to be thoroughly investigated at each step:
Most of these issues can be overcome. If they can’t, there are plenty of other buyers out there looking for homes.
Look up the details of the new options on the tax credit extension or consult with an expert familiar with it.
The point is to get out there and make it happen!
Be a Renegade,
Drew Sygit
Drew’s Mortgage New’s
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