“Now is basically the worst time ever to buy a house” So screams the headline on a HousingWire April 8 ’22 article.

https://www.housingwire.com/ar…

So says Connie Kim from Housing WireThis is technically true. However, perhaps we do need to shift our strategy and mindset to compete in today’s market.

With DSCR loans and vacation homes loans at about 7% it is tough to go out and purchase a home.

Here are some things to keep in mind as you go out and look for your next investment property.

1. Owner financing.  I have had an owner recently agree to provide an $800K loan at 3.5% interest. Even though I didn’t ultimately go ahead with the deal as it did not fit my criteria, the option is there and I am sure will be available on future properties. If the owner demands market rate interest rates, you can always incentivize them with a higher purchase price in exchange for a lower rate.

2. Consider a “subject to” loan. In this case, you can take over the deed for the home while keeping the current sellers’ loan in place. Although the bank does have the right to cancel the loan if the deed is moved to a different name, this is rarely enforced.

3. Try to get the owner to finance a large portion of the loan at a low-interest rate. Say you purchase a $100K house. Perhaps the seller can finance $50K at 4% interest and take a loan from a bank for the remaining $50K.

There you have it! If you have any other ideas on how to compete in today’s markets, please respond and share tips in the comments.

Jacob Morgenstern