Risk is not as high as it sounds

There are only 2 risks I can think about.

1. The buyer is not going to come up with 20-25% down.

2. Bank may decide to exercise "due on sale" clause.

For risk #1, would you rather let the house sitting there, hard to sell, and paying property tax, insurance, HOA fee or take very minimium down payment, even 0 down to have someone move in and make a regular monthly payment to you?

To me, let it sit there without any income is riskier.

For risk #2, I can assure you that you have less than 2% chance your loan will be called, statistically. There is nothing gurenteed in investment. If your odd is 98 against 2, what are you worrying about?

I see constently people taking unfavorable odds in stock invenstment. When has 98 agianst 2 suddenly become a high risk event? I don't get it.

For people in areas with high median house price, this is practically the only way to make it work.

I personally did wrap around mortgage, also did seller finance on 2nd lien on a commercial property. Every one thought I was crazy to carry a 2nd lien on a commercial property, it is not as bad as it sounds. In commercial deals, everything is negociable, therefore thinking out of box is very important.

 

 

 

所有跟帖： 

• the risk is with human, not system. -jy101- ♂ (316 bytes) () 12/25/2011 postreply 07:51:47

• 精髓，是这个道理。 -SunshineInCA- ♀ (0 bytes) () 12/25/2011 postreply 09:16:23

• 回复：the risk is with human, not system. -392- ♂ (109 bytes) () 12/25/2011 postreply 09:46:30

• If you can not get 4% for 30 years on the market -monkeyboy- ♀ (209 bytes) () 12/25/2011 postreply 10:52:38

• How do I deal with these risks -monkeyboy- ♀ (1444 bytes) () 12/25/2011 postreply 11:15:01

• That's not enough to avoid the risk -texastrader- ♂ (1637 bytes) () 12/25/2011 postreply 11:30:05

• Agree with your point -monkeyboy- ♀ (1608 bytes) () 12/25/2011 postreply 12:11:32