Money Or Credit - How To Cater To More Of The Buying Marketplace

If you look at the statistics today for the American population, you’ll find out quickly that it can be unrealistically difficult for the average person to obtain a traditional mortgage loan. In order to qualify through most sources, a buyer has to have a high credit rating (which includes a low debt-to-income ratio) and 10-20% of the purchase price of the home available for a down payment. Incredibly, only about 35% of the population can achieve both. As a real estate investor, you have to be sensitive to this information because it will affect your ability to make money in the long run. If you can’t target the people who are left out in the cold by the traditional mortgage lenders, you will have great difficulty in making your sell. In other words, you have to find opportunities for these individuals to be able to purchase a home, and you want them to come to you to do so. There are several aspects to making purchasing easy for those who cannot obtain a traditional mortgage loan. First, as a real estate investor who has been properly trained, you need to avoid working with buyers who have rather good credit or money. While they may not have great credit, a number of individuals will have a lump sum with which they can make some sort of down payment. You can use the sum and allow them to sign up for a lease purchase option. This gives them the opportunity to get into the home and work on their credit while you still have income. The other option is to use seller financing. With seller financing, you use the money as a down payment, financing the home for the individual who has no bad credit. In order to target the crowd who meets one qualification but not the other that is required to obtain a traditional mortgage loan, your best bet is to advertise. Let people know you have real estate available with no bank qualifying. This is a great way to attract the attention of the entire purchasing population, even those who have money for a down payment, simply because it is an eye catcher. It opens up possibilities for all potential buyers, and you’ll have a greater response. Above all, be willing to work with potential buyers and use what they have. If they don’t have money or credit, there is not much you can do, but some buyer will have one or the other and can work with you so you make money and they achieve their dream of owning a home.