When looking for a “No Money Down” investment, an option gaining popularity is deposit bridging. If deposits aren’t available as ready cash it is advisable to be able to borrow it. Bridging is of two types open bridging and closed bridging. In open bridging, lenders don’t know when the money will be repaid while in closed bridging they do.

The first option is called closed bridging. It is offered as a secured short-term loan against any residential property. It requires Market Value lending where investment doesn’t come from a vendor but a third party. Deposit bridging, works well for individual resale properties. If the incentives are high enough it can result in a “No Money Down” investment but it is usually a Low Money Down.

There is also what is known as Same Day Bridging and Refinance. Mortgage Express allows investors to buy a property at a net price, using short term bridging finance (24 hours). The investor immediately re-mortgages the property, based on the market valuation. It was an excellent product but has been withdrawn recently. You can still use the bridge and re-mortgage system, but have to wait for 6-12 months to do the re-mortgage, so same day is a thing of the past.

Lastly is the idea of Open Bridging. In this Short and Medium Term Techniques are used for Low and No Money Down. Lenders fund short term finance up to 12 months. They will lend up to 70% of Open Market Value. Many lenders restrict the maximum borrowing to 85% of the cost, no matter what the open market value and the purchase price is. However if you pledge another property, you can borrow up to 100% including all costs. This would result in a true No Money Down deal.

Open Bridging is suitable for investment property with large discounts, new build and re-sales, auction property and distressed sales. However open bridging isn’t advisable as the cost of open bridging is high, obtaining discounts is difficult and the investor cannot commit on a mortgage 6-12 months ahead.

The concept of seller financing has caught on quite fast and is very beneficial to those who are planning to buy their first Dallas investment property. It also helps those people who are unable to get a loan from the normal or traditional route. One does not have to deal with financial institutions and since the interest rates are low, you would find that it facilitates investment property purchase. It is possible to even refinance and sell as well as build credit while refinancing for lower payment. Sellers are able to take the 30 year rate and put a spread on it. Given the current real estate market sellers have made seller financing widespread and regular so the process has become quite standardized too.

Sellers want a fast closing with little hassle. Sellers also want to pay as little taxes as possible on the gains incurred. Sellers are anxious to sell; and in a sluggish real estate market, owner-financing is an attractive alternative to losing money while properties sit vacant. Otherwise, homes can remain on the market for years with owners either making mortgage payments out of pocket or renting. Sellers may consider 100% owner financing (also called rent to own home listings) or partnering with the right buyer of Dallas investment property for a win/win outcome.

When sellers offer seller financing to buyers, they in effect make it easier for buyers to purchase the property thus enhancing buyer interest. In these times, sellers should be helping buyers buy the property which is in sharp contrast to the opinion expressed by some sellers that financing shouldn’t be a seller’s concern. There are cases where sellers help in contributing 6% of the sales price which facilitates first time buyers’ completion on the sale of their first investment property.

One of the key advantages of seller financing is that sellers and buyers are spared the rigors of dealing with a financial institution and hence there are hardly any problems in facilitating the sale. In the normal course, buyers can get as much as 50-60% financing, with a lower interest rate and a much longer amortization period. But the sellers must be aware of various rules and regulations like by-laws, insurance policies and budgets and also rules and regulations which could be reviewed by lending underwriters. There has to also be a knowledge that the property’s master association should allow a sale in the first place, or else the sale cannot occur.

Seller financing is a loan in which the buyer assumes the seller’s mortgage while the loan stays in the seller’s name. The buyer becomes the owner of the Dallas investment property when the seller signs the grant bargain, sale deed, or other specific device to transfer the property. Sellers that have built up equity in their home usually don’t feel like waiting around 30 years to see a return on their money come out of the investment property. For these situations the interest is often set up on a balloon payment. Sellers also want to pay as little taxes as possible on the gains incurred. In numerous cases, the seller can have most of his needs satisfied by an installment sale rather than a conventional cash sale.

Owner financing occurs when the owner of a property is willing to hold a note on a piece of investment property that he/she wants to sell. The financing can be for the price of the property in full or a part of it. This is based on the need of the buyer. In the normal course, most sellers would not like to carry a mortgage. But the eagerness to sell the property without much delay as well as preventing a fall in property value often compels sellers to offer owner financing to lure customers. Consider this a Beginners Guide to Investing of sorts.

There is no rule or restriction that owner financing be limited only to traditional residential investment property. Indeed, a vast host of property types including land and real estate, commercial property and what have you. Some of the conditions under which owner financing may be concerned include situations when the property is not moving fast in the market or if it is in a rather dilapidated condition. Owner financing is the process where the owner extends credit to the buyer without the intervention or involvement of banks or financial institutions. It has been observed empirically that owner financing is more common among investors as compared to homeowners.

As far as interest rates applicable are concerned, these are generally 1.5% to 2.5% over the prime rate which in turn is set by the financial institutions. While interest rates vary with the institution, one can nullify the need for research to get lower rates as many sellers give at a percentage or more below the prime rate. Zero financing is also not heard of on some investment property gems.

If you want to sell off your investment fast and also get a high rate for it, it makes sense to offer owner financing. You may also be able to get first mover advantage and better prices as owner financing makes your investment property much more attractive to prospective buyers. At the same time, it could also mean that your property is one of the first ones to get sold in the local property market. All of which makes owner financing a very advisable and popular proposition in times like these.

Interest rates on investment property are variable, based upon the Prime rate, with spreads set by financial institutions. Typical spreads are 1.50% to 2.50% over prime, with lower rates to investors with stronger historic debt service coverage. Interest rates of these institutions vary. For getting lower rate, some research work becomes inevitable. Owner financing eliminates this research, as most sellers will agree to a percentage point or more below prime, with a few cases setting up zero interest financing.

Offering a prospective home buyer seller financing is a great way to sell a home. You typically get top dollar and sell the home much faster. Offering terms generates a lot more buyers looking at investment property, and can sometimes make the difference of being the first to sell a property in particular neighborhoods.