It’s NOT About The Price!
When I met a veteran real estate investor a few years ago, that was when I learned that’s NOT about the price. Unlike the typical real estate buyer or the so called “investor” who cares about lowballing and buying below tax assesssed and getting the property at below market value, the Veteran Real Estate Investors don’t always think like that.
First of all they make a tonne of offers. They do that because they’re looking for the motivated seller.
They think differently. They think outside of the box. They think about terms.
What? What do you mean? Isn’t it about the price?
That’s what I thought too. But, often veteran real estate investors are willing to pay market value or EVEN ABOVE MARKET VALUE if the terms are favorable.
What do you mean if the terms are favorable?
What if you could get the seller to give you a mortgage at an incredibly low interest rate? That would be called a vendor take back mortgage, a term that describes a seller giving you a mortgage so you if you can’t your banks to give you money or give you a good rate, the seller would give you that mortgage and you’d be making your mortgage payments to the seller, either weekly, bi-weekly or monthly or whatever you guys agree to.
What if the savings from the reduced interest rate more than covers the above market value price you are going to pay? What if a home is worth $500K, and the seller is willing to give you a vendor take back mortgage with 0.5% interest where outside banks are offering a 3% interest?
You’re asking, why would the seller give me that kind of interest rate?
There are sellers out there who are seniors, their house is paid for and they just want that regular cash flow maybe because the government pension is not big enough and you can give that kind of cash flow. You may have to pay $550K when the house is worth $500K but over the long term, you’re saving a lot more money because of the low interest rate.
Just remember, it’s not always about the price, even if it’s overpriced, if the terms are right, then there’s potential.
Think differently, think terms.
For more information about this topic, feel free to email or call me.