Why Not Invest By Selling Your Property?

By: Kane Thomas


Investing in single-family homes in San Diego these days is relatively a bit different than itís been within some time.

In the old days, investors were content to pay lofty prices and to subsidize monthly negative cash flow because they felt strongly that prices were going to climb far quicker than the negative cash flow would corrode their money.

In the aftermath of the subprime meltdown, those days are nothing other than a vague memory.

Todayís knowledgeable investor understands that if a property doesnít produce a positive cash flow every month; together with a return on the cash down payment, there is really not much point in owning the property.

The explanation for this is that most of the investors I speak with donít think that prices are going to go up any time soonÖ.and why would they? The joblessness rate is around 15%, the global economy is in recession, California is broke, the ominous pile of foreclosures is titanic, and the quantity of mortgage debt that is due for an interest rate reset in the subsequent 24 months is larger than what we saw all through the sub-prime fiasco, and a good number of these properties will almost certainly end up in foreclosure as well.

Glowing depiction, isnít it?

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

For example, reflect on the investor that bought rental properties 20 or so years previously.

Odds are, their houses are paid off and todayís market estimate is well above what they paid so many years ago. What has happened for the period of that time? The investor has gotten older and the home is possibly in need of work.

As investors get older and richer, they are less liable to want to continue to be involved in organizing and repairing properties. Their time has become their most treasured asset and they already have sufficient capital to meet their wishes. The mixture of these two things makes them ripe as a probable seller.

The key is to constitute a deal that involves seller financing. By doing so, the selling investor can continue to receive the monthly income to which they have grown used to and they get to relieve themselves of the agitation of managing the home. From a tax point of view, instead of being faced with a steep tax bill when they sell, the selling investor can now stretch the tax bill over the duration of time they are in receipt of income from the buying investor.

For the buying investor, the arrangement is similarly gripping. Rather than having to go to a pretender lender (an institution), the buyer can negotiate directly with another human being. This results in a contract that typically involves only a small down payment, a moderate interest rate, and loads of elasticity in the future.

The final result of a arrangement like this sees both parties better off than they were before, but for very distinct personal explanations.

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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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